First Bank must bear ATM theft losses: FSC

Taipei, July 12 (CNA) Taiwan's top financial regulator said Tuesday that First Bank will have to bear full responsibility for the NT$70 million (US$2.17 million) that was stolen from the bank's automatic teller machines (ATMs) over the weekend.

Financial Supervisory Commission (FSC) Vice Chairman Kuei Hsien-nung (桂先農) said the agency, which regulates securities markets, banks, and the insurance sector, has asked First Bank to explain the matter quickly to the public.

It has also asked First Bank to make an overall review of its internal controls to avoid similar incidents in the future and said the bank should bear the cost of all losses suffered and not compromise the interests of its customers, according to Kuei.

In the incident, which First Bank reported to the FSC on Monday, NT$70 million was stolen from 34 First Bank ATMs at 20 branches in Taipei, New Taipei and Taichung. The bank suspects that hackers used malware to manipulate the system.

On whether First Bank was guilty of a management lapse, Kuei said that cannot be determined until an investigation by an information security agency is completed.

In response to the theft, believed to be the first of its kind in Taiwan, the bank has suspended use of the same model machine made by Wincor Nixdorf, a German vendor of retail banking hardware, software, and services.

Chang Hwa Bank and Taiwan Cooperative Bank announced that they would also suspend use of the same ATM model.

Banking sources said Wincor Nixdorf is the No. 1 brand in Taiwan's ATM market and has a market share of over 80 percent in major convenience chain stores and supermarkets.