Standard Chartered Plc (STAN) said wealthy
clients’ confidential information was stolen in Singapore from a
printing company, underscoring the vulnerability of global banks
to attacks from hackers and thieves.
Singapore’s central bank plans to consider regulatory
action against Standard Chartered after reviewing the bank’s
investigation into the incident. The London-based lender said it
hasn’t found any unauthorized transactions since the theft from
Fuji Xerox Co., which was hired to print statements for the 647
clients, and is contacting affected customers. The city’s police
discovered statements for February on a laptop seized from an
alleged hacker.
The security breach threatens to undermine Singapore’s
reputation as a private-banking hub for Asia. The city is Asia’s
largest wealth management center with about $800 billion in
offshore assets, according to Boston Consulting Group. Shares of
Standard Chartered, which this week forecast that earnings from
its consumer-banking unit will drop, fell to the lowest in five
months in Hong Kong trading.
“It’s a bank issue, but it’s also a regulatory issue,”
Sandy Mehta, chief executive officer of Value Investment
Principals Ltd. in Hong Kong, said by phone. “Even in some of
the most sophisticated jurisdictions like Singapore, there just
needs to be more focus on operations and controls for banks.”
Hacker Attack
The information was stolen from a server used for Standard
Chartered Private Bank at a printing facility, Fuji Xerox
Singapore Chief Executive Officer Bert Wong said in a statement
yesterday. Other clients weren’t impacted and a forensic team is
probing the breach, he said.
The data was found on a laptop taken from James Raj
Arokiasamy in the course of investigations, the police said in a
separate statement yesterday. The Singaporean was charged on
Nov. 12 with causing unauthorized modifications on a municipal
council website by posting an image of a Guy Fawkes mask, symbol
of the international hacker group Anonymous. The charges
followed cyber attacks in November on websites across Southeast
Asia for which Anonymous claimed responsibility.
Arokiasamy’s lawyer, M. Ravi, declined to immediately
comment today.
“This incident will raise questions about Standard
Chartered’s ability to deal with client data,” Ronald Wan,
chief China adviser at Asian Capital Holdings Ltd., said by
telephone. “Regulators and financial institutions need to think
about whether there should be more stringent oversight and
requirements on third-party service providers.”
Shares Drop
Shares (2888) of Standard Chartered dropped 2.8 percent to
HK$169.20, the lowest close since July 3 in Hong Kong trading.
The Monetary Authority of Singapore is “actively
engaging” with Standard Chartered on the theft, which is an
isolated case, the central bank said.
“Globally, financial institutions have been facing an
increasing number and variety of cyber threats,” the central
bank said in a statement yesterday. The theft “underscores the
need for heightened vigilance in FIs, including close management
of risks pertaining to service providers.”
The incident should remind banks and other financial
institutions of the need to have “robust” systems and
technology infrastructure to protect client data, Ong-Ang Ai
Boon, a director of the Association of Banks in Singapore, said
in an e-mailed statement.
“ABS and our members are cognizant of this and are
constantly vigilant in our efforts to combat cyber threats and
crime,” Ong-Ang said.
Singapore’s Wealth
Switzerland is the world’s largest offshore wealth-management center, with $2.2 trillion in assets, according to
Boston Consulting in May. Hong Kong and Singapore manage a
combined $1.2 trillion.
“The confidentiality and privacy of our clients are of
paramount importance to us, and we take this incident very
seriously,” Ray Ferguson, chief executive officer of Standard
Chartered Singapore, said in yesterday’s statement.
About 8.2 percent of households in the city-state have
assets of $1 million or more, giving it the fifth-largest
proportion behind Qatar, Switzerland, Kuwait and Hong Kong,
Boston Consulting said in May.
“Hackers are seeing the profit potential in accessing bank
data and undoubtedly selling it to tax and enforcement
authorities worldwide, not to mention the more significant
possibility of outright theft,” said Scott D. Michel, president
of Washington-based law firm Caplin Drysdale Chartered. “I
suspect we will see more of them globally in the next couple of
years.”
To contact the reporters on this story:
Sharon Chen in Singapore at
schen462@bloomberg.net;
Jasmine Ng in Singapore at
jng299@bloomberg.net;
Sanat Vallikappen in Singapore at
vallikappen@bloomberg.net
To contact the editor responsible for this story:
Chitra Somayaji at
csomayaji@bloomberg.net
Standard Chartered Says Bank Client Data Stolen in Singapore (3)
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