Critical ChatGPT Vulnerability Targeting Financial Institutions Identified, Strategic Cloud Partnership Announced Between Finastra and IBM, Affirm's Expanded Credit Reporting, & a Data Breach at Western Alliance Bank Affects Thousands of Customers

Critical ChatGPT vulnerability identified targeting financial institutions Strategic Cloud Partnership announced between Fenestra and IBM affirms expanded credit reporting and a data breach at Western alliance bank affecting thousands of customers. These stories and more on banking on Disruption daily for Friday, 21st March 2025. I'm Fred Cadena. First up today, the White House's attempt.

To scale back funding for the Community Development Financial Institutions Fund is facing significant opposition from various stakeholders. Among the opponents are bankers, industry executives, lawmakers and Treasury Secretary Scott Besant, who supports the continuation of the CDFI but commits to reviewing the program. Last year, the CDFI fund awarded $6.3 billion to aid around 9 million individuals by supporting capital supply.

An executive order from the White House mandates that the program, along with others, reduce its function to the legal minimum. Senators Mark Warner and Mike Croppo have publicly supported the fund through a joint letter. Besant assured that while CDFIs are crucial for Main street, the treasury will adhere to the executive order by documenting statutory requirements. Meanwhile, 495 certified CDFI credit unions reliant on the fund face dire uncertainties about future funding and support.

Shifting gears A firm announced it will start reporting all payment plans to Experian beginning April 1st. This includes the addition of BI weekly pay in 30, pay in 2 and. Pay in 6 plans to its existing credit reporting of longer term loans. Although this expansion won't immediately affect traditional credit scores, future models may incorporate these changes.

Experian is the first credit agency to partner with a firm on this initiative, with potential for other agencies to follow. Analytics firm Fykio is also exploring integrating Buy Now Pay later data into credit score analysis, based on an earlier joint study with a firm. On the cybersecurity front, Western alliance bank has suffered a data breach affecting nearly 22,000 individuals. The breach, occurring between 10-12-24 last year, compromised highly sensitive customer information, including Social Security numbers and birth dates.

Bank officials confirmed the attack stemmed from. A vulnerability in a third party vendor's. Secure file transfer software, potentially linked to recent exploits in Clio software products that cybersecurity researchers began tracking last October. In related news, cybersecurity researchers at Verity have discovered a significant vulnerability in ChatGPT, which could potentially allow hackers to obtain unauthorized access to sensitive consumer data and and applications.

This flaw enables attackers to inject malicious URLs, forcing unintended requests by the application, posing a risk particularly to businesses utilizing generative AI technologies. Although the National Vulnerability Database categorizes the bug with medium severity, its Exploit Prediction Scoring System Score was recently updated to a more alarming 55.36%. More than 10,000 exploit attempts were recorded within a single week, originating from one malicious IP address, targeting mainly US Financial institutions and government entities.

Organizations are advised to monitor for suspicious activities and ensure systems are continuously updated with the latest security patches to mitigate these risks. And finally today, finistra and IBM have joined forces to enhance cloud based lending solutions. The partnership will leverage IBM's cloud technology to optimize Finistra's core banking offerings, aiming to accelerate digital transformation for financial institutions. This joint effort is designed to improve efficiency, streamline processes, and support open banking initiatives.

By integrating IBM's robust cloud capabilities with Finastra's comprehensive lending platform, the initiative targets enhanced agility and scalability for banks and financial services. That's all for this week. Thanks for tuning in to Banking on Disruption Daily. Until Monday, this is Fred Cadena wishing you success in your digital pursuits.