Trouble on Wall Street: How Insider Risk Affects Financial Institutions

In the financial services sector, insiders have been a longstanding problem. In the past, it was individual crooks or gangs making alliances with disgruntled bank tellers, security guards, and vulnerable employees. However, in today’s information age, the situation is even more dangerous. Insiders now have extensive knowledge of their organisation’s practices, systems, and applications, allowing them to inflict significant damage. Just think about some high-profile examples of insiders who have caused major setbacks for financial organisations:

Logic Bomb UBS PaineWebber: In March 2002 a logic bomb—a piece of often-malicious code that is intentionally inserted into software—erased 10 billion files in the computer systems of an international financial service company. Losses were estimated at $3 million. It was later revealed that the logic bomb was planted by a disgruntled employee who had recently vacated the company over an annual bonus dispute.

Amazon Web Services Case: In 2019, software engineer Paige A. Thompson used her former insider knowledge to illegally access one of the AWS servers storing Capital One’s data, resulting in the exposure of personal and financial data from more than 100 million customers in the United States and over 6 million in Canada.

Postbank: In 2020, the South African Post Office Bank suffered a significant internal security breach, forcing the bank to replace 12 million bank cards at the cost of $58 million after insiders compromised the personal data of account holders by copying a master key.

London Whale a.k.a Bruno Iksil: In 2013, JPMorgan Chase, one of the U.S. largest banks, was set to pay US$ 920 million to U.S. and British regulatory authorities by admitting errors in its internal controls that led to the “London Whale” scandal. Recognised as the “London Whale”, was Bruno Iksil, an employee at JPMorgan’s London office, whose recorded losses of more than $6.2 billion triggered a significant reaction in credit markets worldwide.