Financial services are prime targets for hackers due to the high value of the data and assets involved, including vast amounts of money, personal and financial information, and valuable intellectual property. The complex and interconnected systems of financial institutions make them attractive to cybercriminals searching for vulnerabilities to exploit.
Successful attacks on financial services can have severe consequences, including financial losses, reputational damage, regulatory penalties, and compromised customer trust.
FMT reports that according to an insider, the Labuan Financial Services Authority (Labuan FSA) recently experienced a cybersecurity breach believed to be orchestrated by hackers who have demanded a ransom. The breached IT system of Labuan FSA contains sensitive and confidential information pertaining to offshore entities, including companies, trusts, foundations, as well as insurance and banking data. This system holds crucial details about shareholders, funders, trustees, and beneficiaries of corporations registered in the tax haven.
Labuan FSA announced yesterday that it had encountered a cybersecurity incident on 27 April, affecting its online systems. The organisation is actively investigating the extent of the impact on its systems and has temporarily taken certain operational systems offline to mitigate further risks.
As a statutory body operating under the finance ministry, Labuan FSA serves as the central regulatory, supervisory, and enforcement authority for Labuan’s international business and financial services sector.
FMT stated that the alleged hacking incident came to light during a meeting between the Labuan FSA director-general and representatives from various stakeholders last week.
In the meantime, a Labuan banker revealed that the incident has compelled banks to resort to manual reporting. Moreover, the system outage is causing delays in company registrations, which is problematic since these foreign companies contribute significant tax revenues ranging from RM900 million to RM1 billion to the country. The local Labuan economy will also be adversely affected if companies are unable to establish themselves promptly.
When approached for comment, a finance ministry spokesperson stated that Labuan FSA has taken measures to minimise disruptions to the financial and business services industry.
