This week, news broke that two of Canada’s major financial institutions, the Bank of Montreal (BMO) and the Canadian Imperial Bank of Commerce (CIBC) were targeted in a cyber attack. Reportedly, the breaches compromised thousands of customers’ information, leaving many wondering how the prevalence of these types of breaches should be addressed. One possible solution is through the use of blockchain and adjacent technologies

Thousands of BMO and CIBC’s Simplii customers targeted

According to individual statements from both banks, the BMO breach affected under 50,000 customers. The breach that targeted CIBC’s online banking service, Simplii, is said to have affected 40,000 customers.

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Simplii Financial claims that it moved to implement enhanced security measures upon learning about the breach. The institution further added that it will be reaching out to clients proactively through all channels.

“We’re taking this claim seriously and have taken action to further enhance our monitoring and security procedures,” said Michael Martin, Simplii Financial’s senior vice-president, in a statement. “We feel that it is important to inform clients so that they can also take additional steps to safeguard their information.”

In a statement, BMO shared a similar sentiment, although the relationship between the two breaches is currently unclear. The bank is working with authorities and is contacting affected customers.

How blockchain technology can prevent breaches

One of blockchain’s most praised features is its ability to secure information through making security breaches extremely difficult. In recent times, breaches to financial institutions continue to spark conversations about how new technologies could better secure the private information of clients.

Blockchain technology serves as a ledger where information is stored across the entirety of a network. With correct implementation, attempting to access or compromise this data is made nearly impossible, as there is no single point of failure in which a breach can occur.

When a malicious party attempts to modify data or breach user information, the process is first verified with all of the connected devices in the network. As a security measure, this feature is extremely useful for thwarting unwanted access and ensuring accountability. However, the technology is not without its drawbacks.

Currently, blockchain technology is still very new in comparison to current methods of data storage and security. Issues like network speed, general uncertainty about new technology, and the arduous process of updating current systems could be preventing more institutions from adopting the technology at the current point in time.

Moving forward, it will be interesting to observe how the rise of blockchain technology could impact the existence of data breaches. Used correctly, it is possible that the technology could lead to a world where these types of cybercrimes are much less commonplace.

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