The big four bank shares are down today.
At time of writing, National Australia Bank Ltd [ASX:NAB] is down 1.77%, Australia New Zealand Banking Group [ASX:ANZ] dropped 1.97%, Westpac Banking Corp [ASX:WBC] saw share price decrease 1.33% and Commonwealth Bank of Australia [ASX:CBA] is down 1.05%.
What happened to the ‘Big Four’?
Banks have been sending warnings to customers to be more alert after a data breach in the PayID system.
As Nine News reported:
‘The personal banking information of tens of thousands of Australians is at risk following a fresh data breach involving PayID records.
‘Details including phone numbers, names, BSB and account details linked to PayID were all breached in recent days after the New Payments Platform (NPP) database was hacked.
‘The issue was revealed by NPP Australia – a real-time payments platform mutually owned by 13 major financial institutions, including the big four banks.’
Pay ID is a platform that allows customers to send money to one another in real time without the need of a BSB and account number. Instead, Pay ID uses details like an email or phone number of ABN.
To make a payment all you need to do is, for example, type up a person’s phone number. It then shows you the details associated to that account, such as the person’s name to check that you are sending money to the right user.
Well, it seems that hackers were typing random numbers to find out what names were registered and tied to these accounts.
This follows another Pay ID data breach Westpac saw in June. In a similar way, back then hackers performed 600,000 pay ID look ups typing in random numbers. The hack exposed the personal details of about 98,000 users.
What happens next?
As the world becomes more interconnected and digital, cyber security is seeing an increase in importance. As the number of data breaches increases, people, businesses and countries will be spending more on cyber security.
Yet the fact that the big four are launching different services like PAY ID shows you that they are facing increasing competition from fintech companies. Fintechs are challenging big banks margins and market share by offering consumers more control.
As fintechs disrupt the sector, choosing the next big fintech winner could be quite lucrative. If you are interested in finding out more about this sector check out our ‘3 Fintech Stocks Breaking Up the Banks’ report here.
For Money Morning