European Central Bank Website Hack Exposes yet Another Fatal Flaw in the Traditional Banking System

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The European Central Bank (ECB) shut down one of its websites on August 15, 2019, after the site was compromised by hackers. According to ECB, unauthorized parties breached the Bank’s Integrated Reporting Dictionary (BIRD) website, but could not gain access to any market-sensitive data.

The hack raises questions over the security of traditional banking systems, especially given the recent surge of robust alternatives such as Bitcoin and other cryptocurrencies.

ECB: No Sensitive Data Was Leaked

The BIRD website, which provides information to bankers on how to produce a statistical and supervisory report, was hacked on August 15, 2019. The attackers successfully injected malware onto the external server that hosts the site. ECB said there was a possibility that the contact data, which includes email addresses, names and position titles of the subscribers to BIRD’s newsletter may have been stolen.

A spokesperson from the central bank said that the earliest evidence of the attack dated back to December 2018. He added that the attack was uncovered during maintenance work on the website. The ECB said that it has already initiated contact with all users affected by the breach and that the website was hosted by a third-party service provider, separate from any other external or internal ECB systems.

Tom Draper, the technology and cyber practice leader at risk management outfit Gallagher, said that the attack was similar to the Capital One breach earlier this summer where a former Amazon employee was charged with publicly releasing millions of Capital One bank records. The BIRD website was launched in 2015 as a joint initiative of the Eurosystem, which included all Eurozone central banks and the banking industry.

Cryptocurrency: The Robust Alternative?

While the traditional banking system is based around a centralized structure, cryptocurrencies like Bitcoin and Ethereum are decentralized in nature with no ruling authority. This means that while a single point of failure could potentially crash the traditional banking structure, most digital currencies can continue to function and operate even if a handful of network participants are affected.

Additionally, cryptocurrencies can provide financial services to individuals that have long been excluded by traditional banking systems. Strong encryption practices employed in cryptocurrency transactions offer better security against fraud as well.

In a recent Q&A session on Twitter, ECB Chief Economist Philip Lane said that Bitcoin is not a currency, but rather an asset that is very volatile. In May, an ECB report concluded that cryptocurrencies would have little to no impact on the traditional economy, but opposing theories still remain.

Do you think most people would be better off holding their wealth in digital currency instead of a bank or similar financial institution? Let us know your thoughts in the comments below.

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Images are courtesy of Twitter, Shutterstock.


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Rahul Nambiampurath is an India-based Digital Marketer who got attracted to Bitcoin and the blockchain in 2014. Ever since, he's been an active member of the community. He has a Masters degree in Finance. <a href="">Email me!</a>

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