Suspecting Eyes Turn to Insiders

When two of the nation’s largest banks were forced to notify thousands of customers that their financial records may have been stolen, there wasn’t a hacker, a missing laptop or a lost box of backup computer tapes to blame.

This time, police believe, customers of Wachovia Corp. and Bank of America Corp. were the victims of bank employees, workers whose jobs at the Charlotte-based banks granted them access to information valuable enough to sell for $10 an account.

Security experts believe it’s that battle against insiders -- the theft of Social Security numbers and other sensitive data by those with the authority to access them -- that will consume banks and other financial institutions as they fight a recent run of security breaches.

“We’ve got a nasty problem and it keeps getting worse over the past couple of months,” said Peter G. Neumann, a security expert with SRI International in Menlo Park, Calif.

Security experts such as Neumann believe inside jobs have the potential to be far more damaging to consumers than accidental losses of data or attacks by hackers similar to one disclosed June 17 at Atlanta-based CardSystems Inc., which exposed 40 million credit and debit card accounts.

And the protections banks use to thwart hackers -- firewalls and encryption, for example -- have no ability to stop employees who have authorized access to secure information.

The insider case at Bank of America, Wachovia and two other banks -- involving a far smaller number of accounts than the hackers’ assault on CardSystems -- could prove to be far worse for consumers, said Avivah Litan, an analyst with Stamford, Conn.-based Gartner Inc., an information technology research firm.

“It may not be bigger, but that stuff is a lot more dangerous,” Litan said. “These are people who have access to a lot more personal information, so it’s very serious.”

Wachovia and Bank of America were forced to alert more than 100,000 customers in May after police in New Jersey charged nine people, including seven bank workers, in a plot to steal financial records of thousands of bank customers.

“About 70% to 80% of the risk is from insiders, although not all of them are as malicious as the case in New Jersey,” said Steve Roop, vice president of marketing at San Francisco-based Vontu, a firm specializing in data loss prevention. “Sometimes it is well-meaning but poorly informed workers.”

As might be expected when the subject is security, neither Wachovia nor Bank of America is willing to explain in detail efforts to protect sensitive data from employees who want to illegally sell private account information.

“All of our associates must adhere to a code of ethics and to company policy,” Bank of America spokeswoman Tara Burke said. “And our bank associates only have access to the information they need to provide service to our customers.”

The bank does perform criminal background checks on all new employees, using fingerprinting and other screening methods. Contract labor suppliers must perform criminal checks on temporary employees they supply to the bank, she said.

But the problem with background checks is that they don’t work, said Jim Stickley, chief technology officer at TraceSecurity Inc., a Baton Rouge, La.-based security company.

“Sure, [it works] if you are looking at a murderer or someone with a criminal record. But there are a million idiots out there who are lucky so they don’t have a record,” he said. “No matter what you do, all it takes is one person who is down on his luck or realizes he can make a lot of money doing this. Then you have your biggest nightmare.”

In all, Burke said, Bank of America spends about $250 million annually on various security protections and has hundreds of associates whose sole function is to protect information.

Wachovia spokeswoman Christy Phillips said the bank employed similar protections, including offering programs and training to educate employees on how to safeguard information. Background screening is a longtime policy at Wachovia, and there are tools and procedures that limit access to information to employees whose jobs require such access.

“We routinely review our processes and make changes as appropriate,” she said

Among the other difficulties the banks face when working with employees, Roop said, is a high level of turnover.

“These banks hire hundreds of new people every month,” Roop said.

Among the steps banks can take to fight insider ID theft is to individually limit each worker’s access to customer information, Litan said. Such a system specifies exactly what customer information each employee can see, touch and update.

But that also requires managers to constantly monitor the clearance levels of thousands of individual employees.

Another way to police insider theft is “the intimidation factor,” Stickley said.

Although some workers might complain that their rights are being infringed by aggressive monitoring of their work activities, Stickley said, they need to understand “they are dealing with extremely confidential information that can wreck a lot of people’s lives.”

And at the office, Litan said, bank employees working with sensitive information know that aggressive security comes with the job.

But in the end, even the experts said protecting sensitive information from insiders comes down to basic human honesty.

“If someone wants to do it, they are going to do it,” Stickley said.