Capillary Technologies Responds to Cyber Banking Fraud

Capillary Technologies, a prominent platform for customer loyalty and engagement, has revealed that one of its recently acquired international subsidiaries was subject to a complex cyber banking fraud. This attack led to the illicit transfer of around EUR 3 million (approximately Rs 32.7 crore) to unauthorised third-party bank accounts.

Details of the Fraudulent Activities

In a filing with the stock exchange on Monday, the company explained that the cyber fraud was carried out using sophisticated deepfake techniques. These included voice cloning, forged signatures, and social engineering, which were employed to impersonate key managerial personnel (KMPs) and authorise the fraudulent transactions.

Recovery Measures and Legal Actions

Based in Bengaluru, Capillary Technologies has taken immediate legal and operational actions to recover the misappropriated funds, working closely with law enforcement agencies, cybercrime units, and banking institutions. The affected subsidiary is insured under a cyber and crime policy, with the insurer already informed. The assessment of the insurance coverage and the potential financial repercussions is currently underway.

Initial Recovery Efforts Yield Results

Capillary Technologies reported that it has managed to recover EUR 0.45 million (around Rs 4.9 crore) by taking swift action immediately after the fraud was identified. The company noted that additional funds have been traced, and related bank accounts have been frozen, consequently minimising the amount at risk, although the precise figure is yet to be established.

Timing and Operational Status

According to the stock exchange filing, the fraudulent incident took place shortly before the weekend. In prioritising the safeguarding of the funds and collaborating with banks and investigation bodies, the company experienced a delay in disclosing the incident to the stock exchanges.

Assurance of Data Integrity

Capillary Technologies has confirmed that there is no indication of any breach concerning customer data, employee information, or its technology infrastructure. Business operations are ongoing without significant disruption. The company has stated that this incident currently does not necessitate any amendments to its annual or long-term business objectives.