Cyber attack to weigh on non-bank lender’s bottom line

The results showed cash net profit after tax fell 23 per cent (47 million), from the previous year but noted the $8 billion in new volume across pay and money divisions.

Managing director and chief executive Bob Belan said the biggest challenge was the rapid change in monetary policy, resulting in a $54 million increase in funding costs.

He said the sale of the insurance business is expected to return approximately $90 million as well as the closure of “small ticket Buy Now Pay Later” platform, which will generate $10 million.

In addition, Mr Belan apologised for the major cyber attack last month, where almost 8 million driver’s licence numbers and hundreds of thousands of passport numbers were stolen in late March 2023.

“This incident is deeply regrettable and I apologise sincerely for the concern and distress it has caused those that have been impacted,” Mr Belan said.

“We can’t undo what has happened but we can take responsibility for supporting customers through this and to take the appropriate steps to safeguard our business from an incident like this happening in the future.”

Consistent with government advice, Latitude declined to pay a ransom demand from the criminals behind the attack.

The matter is under investigation by the Australian Federal Police and Latitude continues to work with the Australian Cyber Security Centre and cyber security experts on its response.

Given this, chairman Mike Tilley said the board’s ability to “speak freely” on these matters was severely restricted by the company’s obligations to not inhibit or influence the police inquiries or investigations.

Mr Tilley said: “The disruption to business as usual is still being assessed and is expected to adversely impact our 2023 growth trajectory and net profit.”

He added that a “comprehensive care package” had been put in place for all impacted customers, which included remediation for the cost of replacing identity documents.

“The management team have worked countless hours since the attack to protect the company and its customers from further damage,” Mr Tilley said.

“While the one-off financial costs of the attack remain under review, Latitude has substantial insurance cover that will help to offset some of the direct costs incurred.”

He added that access had been gained via a third-party service provider and there had been no further threats since 16 March.

Banks launch scam awareness campaign

On the back of the heightened risk to lenders, the Australian Banking Association (ABA) has launched a new campaign on cyber security — which will feature online and in newspapers — and aims to raise awareness of a series of scam scenarios while providing customers with the tools to combat scam attempts.

Meanwhile, the National Australia Bank (NAB) is among the latest to piggyback on the awareness-raising campaign launching a new education and awareness campaign called ‘See Through Scams’.

A recent NAB Economics report into business and consumer experiences of cyber crime found scams or cyber attacks had impacted one in five Australians, with the average loss being $569.

While three in 10 businesses had experienced cyber crime or a data breach, their average loss was almost $20,000.

NAB executive group investigations & fraud Chris Sheehan said the internet and telecommunications networks had become a digital front door for criminals to commit scams and fraud and more had to be done to stop the crime.

“Scammers are robbing Australians blind of their hard-earned money every day, and we need to stop the crime before it happens,” Mr Sheehan, a former Australian Federal Police senior executive, said.

“Scams often happen when people are rushing, tired or distracted.

“We want to help people see scams differently and highlight the moment where split-second decisions are made, which, as our research shows, can have devastating financial and emotional consequences.

“Educating yourself and the people around you — friends, family and colleagues — to see through scams is critical, particularly in today’s digital world. No one wants their money to end up in the hands of criminals.”

In addition, the Commonwealth Bank of Australia (CBA) and Telstra recently announced a new tool — the Scam Indicator — designed to protect customers against phone scams.

[Related: Latitude cyber attack claims 100 000 customers drivers licenses]