Just a week after NatWest launched the UK's first-ever banking service to operate entirely via the Internet, the International Chamber of Commerce (ICC) has confirmed that it is aware of a number of extortion demand made by computer crackers on international financial institutions. A spokesman for the Commercial Crime Department at the ICC, which is preparing to launch its "cyber-crime unit" to investigate computer-related financial crime, admitted that the organisation is all too aware of cases of extortion. "Everyone in the IT business knows that this is one of the big risks," he says. "This is a serious problem, but public paranoia will never help the situation." It is, however, ICC policy not discuss the details of these incidents, although this spokesman also revealed that extortion demands based on a cracking are far more likely to come from an insider. He says, "We have found that usually it is an insider, a previous employee or something, that makes such demands. This is more significant than a threat from the outside." Adam Daum, senior analyst with research firm Gartner Group, reveals why details about this sort of crime committed against such large financial institutions may be sketchy. "There are lots of stories about this sort of thing going around, but it's easy to understand why large companies, and particularly financial institutions, want to keep quiet about it," he says. "Basically it is to protect their share price and to stop other employees from getting the same idea." However, Daum also believes that this approach may not be the most sensible in the long-term. He adds, "What a company will often do is to sack an employee, but rather than make a fuss just give them a good reference. Then they can go off and do the same thing to another company. In general this is just a short-term solution and it would perhaps be better for the industry as a whole to come clean about it." Lance Close, senior financial consultant with Mintel Research, points out that although honesty may be the best policy, honesty doesn't come into it when stock price is concerned. He says, "The stock market places great emphasis on financial institutions having alternative channels of distribution, such as the Internet, and if the it got wind of the public losing confidence, it could affect share price dramatically." Close also suggests that the ICC's decision to break with the financial sector's long-standing tradition of stonewalling on this subject could indicate that it is preparing to make further admissions. "The ICC might be laying the foundations for more revelations," he says. "Perhaps it is trying to bend public opinion and soften the blow before making other announcements of this sort." NatWest remains unmoved by the ICC's statement, however. It does not intend to provide any extra security measures as a response and a spokesperson dismisses the whole situation saying, "We take very great care with the security design of our Internet-based products and systems, and we have leading-edge skills in-house. We constantly look at the situation, but are confident in the mechanisms we use to protect our customers." Take me to the e-commerce special.