Banks Paid Hackers 400 Million Pounds Sterling To Silence Invasion Of Computer Systems; IBIT Forum To Help Bankers Prevent Future Attacks.

ST. LOUIS--(BUSINESS WIRE)--June 4, 1996--Item: The June 3 issue of the "London Times" reported that hackers had been paid 400 million pounds sterling in extortion money to keep quiet about having electronically invaded banks, brokerage firms and investment houses in London and New York with "logic bombs."

According to the article, banks have chosen to give in to the blackmail over concerns that publicity about such attacks could damage consumer confidence in the security of their systems.

Such news comes as no surprise to Winn Schwartau, a leading information security expert whose landmark book, "Information Warfare: Chaos on the Information Superhighway," offered an alarming look at threats that exist against information systems used by banks, corporations and governments.

Schwartau and Robert Steele, a former CIA intelligence expert, will be among 50 globally recognized Forum leaders who will be interacting with banking executives from over 30 countries at the International Banking Information Technology Forum, scheduled for June 10-12 in Basel, Switzerland.

Another IBIT Forum leader, Dr. Peter G.W. Keen, who has been cited as one of the world's top 10 information technology experts by "Forbes" magazine, sees the Forum as a signal that the banking industry is awakening to the threat of information terrorism.

"The banking executives who will attend the IBIT Forum are the visionaries and leaders who recognize the importance of information security," Keen said. "They are facing the challenge and protecting the future of their institutions rather than simply sweeping the threat under a rug and hoping it will go away."

The IBIT Forum will represent the first time that several hundred top executives from dozens of the world's leading banks have come together for face-to-face meetings with information technology leaders, and Federal Reserve Board and Central Bank regulators to discuss how information technology will reshape the future of banking. The security issues Schwartau and Steele will address -- and the solutions they promise to offer to the banking community -- will be among the hottest topics of the IBIT Forum.

The urgency involving information security is understandable given the growing magnitude of the threat to the world's banks.

In his book, "Information Warfare," Schwartau offered this blunt assessment of the information security threats faced by banks and other companies: "At one point, if not already, you will be the victim of information warfare...Your company will become a designated target of information warfare. If not yesterday or today, then definitely tomorrow. You will be hit." And Schwartau warns these information attacks may not come on a small scale.

"If I take down a couple major banks in Europe and a major one in the United States, the banking system as a whole will feel it," he said. "The question is, how much damage can I cause, not only to the banks themselves, but, as a corollary, to the confidence in the system. The confidence in the system is really what keeps it alive more than anything else."

The scenarios Schwartau will describe at the IBIT Forum are alarming. But he promises his presentation will not be all doom and gloom. Instead, one of his key objectives at the IBIT Forum will be how banks can beat the information warriors at their own game.

"My premise is for all intents and purposes, we have those problems solved," Schwartau said. "The fundamental technology exists to prevent attacks on information systems, to prevent denial of services. We can protect the integrity and ensure the confidentiality of account information and customer file data bases. The question is will banking leaders have the resolve to secure their systems before it's too late?"

"The technology exists to keep criminal outsiders from getting inside of electronic sites. It exists though only if people implement the right technology, and beginning at the top, they lead and manage it," said Steele. As the "London Times" article noted, information security is an issue top banking executives have often delegated to other managers. "This approach must change," Keen said. "Delegation of information technology is not a strategy, and therefore not an option for executives!"

In fact, since top executives traditionally haven't developed a strategic policy to protect their information, many of the "cybergangs" who have invaded banking computers have actually gained valuable information by interviewing middle managers and technology people at the banks themselves.

"One of the greatest things we see that goes wrong within banks is they do not have the internal political will, number one, to design a policy at the executive level that their electronic bytes are worth protecting." Schwartau said. "I've met with banks which accept up to hundreds of millions of dollars a year in losses rather than announce it, deal with it, because the Feds are going to become involved. Customer confidence, the stock market, they're all going to start worrying about the integrity of that particular financial institution. Banks don't want the loss of confidence. What banks have to do is put denial of service attacks up toward the top of their lists and deal with how to get solutions for it." -0-

Note to Editors: Winn Schwartau, author of "Information Warfare: "Chaos on the Electronic Superhighway," and Robert Steele, former CIA intelligence expert, will be available for a limited number of interviews prior to the International Banking Information Technology Forum, scheduled for June 10-12 in Basel, Switzerland.

Interview requests from media outlets in North and South America should be directed to Paul E. Klein, at the IBIT Program Office, 314/961-7400. Media members from Europe, Asia and Australia should contact Roland Buchel at the IBIT AG office, (41) 75-233-1090, to request interviews.

Additional information or a complete IBIT Forum program listing of presenters, summit leaders and topics to be covered may also be obtained from Klein or Buchel.

CONTACT: IBIT Forum Program Office

Paul E. Klein, 314/961-7400 (North and South America)

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Home Page: www.ibitforum.li

or

IBIT AG

Roland Buchel, 41-75-233-1090 (Europe and Asia)

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