How Will Middle East Banks Recover From ATM Heist?

The $45 million ATM cyber heist played out as if it were a scene in a movie, and like most movies there is a good, a bad and an ugly. In this case, the good news is that U.A.E. banking consumers were not affected by the global heist, and the bad news is RAKBank and Bank Muscat are still on an uncertain path to recovering major losses. And of course, there remains the ugly truth: The Middle East’s banking system needs serious remedies.

The hard-hitting heist that hit Middle East bank’s RAKbank and Bank Muscat highlighted the urgent need to enforce tighter consumer banking regulations and reformed fraud prevention systems, reports The National.

The criminals involved in the ATM attack used old hotel keys and expired credit cards to withdraw millions of dollars in less than 24 hours. The attack was recorded as one of the largest hits the Middle East financial sector has ever endured. According to CPI Financial, Oman-based Bank Muscat lost over $40 million while U.A.E. based RAKbank suffered from a $5 million loss.

The attack underscored the need for fast-track resolutions, as financial institutions cannot afford to prolong the EMV process any longer. The Middle East banking sector had postponed the implementation of a chip & PIN scheme for debit cards, which originally had a late 2012 deadline. Their banking sector must improve data security standards and real-time fraud detection systems that allow immediate notification to warn banks of any fraudulent activity.

“You must be able to proactively deflect these kind of frauds. Multiple layers of security would make the industry much, much stronger,” said Neil Fernandes, head of country risk management for the Middle East, North Africa, India and South Asia at Visa, The National reports.

The Middle East’s Central Bank is making plans to discuss security measures and how the heist affected the financial system during a meeting they hold every month with the banking sector.

A representative from Bank Muscat told The National, “We reiterate that we are exploring all avenues of recovery so as to protect shareholder interests and will advise the markets accordingly if there are any material developments in this regard.”

To read the full story at The National click here, or to read the full story at CPI Financial click here.