Cyber Attack On Technology Providers In Brazil Affects Reserve Accounts Of Several Financial Institutions

JAKARTA Brazil's central bank announced on Wednesday, July 2, that technology service provider C&M Software, which serves financial institutions that do not have their own connectivity infrastructure, reported cyberattacks on its systems.

The central bank did not provide further details regarding the attack, but stated in a statement that it ordered C&M to close financial institution access to the infrastructure it operates.

Kamal Zogheib, commercial director of C&M Software, said the company was directly victim of a cyberattack involving fraudulent use of client credentials to try to access their systems and services.

The C&M ensures that the critical system remains intact and fully operational, as well as all security protocols have been implemented. The company is also working with the central bank and police of the state of Sao Paulo in an ongoing investigation.

Brazilian financial institutions BMP informed that they and five other institutions had unauthorized access to their reserve accounts during Monday's attack.

BMP explained that the affected accounts were directly located in the central bank and were used specifically for interbank settlement, so that they did not have an impact on customer accounts or institutional internal balances.

BMP added that it has taken all necessary operational and legal steps, and has sufficient guarantees to close the number affected without disrupting its operations or business partners.

An official familiar with the investigation and spoke on condition of anonymity said that C&M served about twenty small financial institutions, and the amount of funds involved in this attack did not reach billions of reais.

Another source said there were no losses suffered by the clients.

The central bank uses the term "financial institutions that do not have their own connectivity infrastructure" to refer to the digital payment institutions that are growing rapidly in the largest economy in Latin America, supported by innovations that encourage competition in the sector.

For example, the Pix instant payment system developed and operated by the central bank, was launched at the end of 2020 and is now Brazil's most widely used payment method.