10 Steps to Eliminate Digital Security Risks in Fintech Project
Any kind of project can be of potential interest to attackers, since the information stolen in an attack can be turned into cash. In the case of financial projects, though, an attack usually results in attackers transferring user or system funds to an unknown location. This eliminates the extra steps it would otherwise take them to reach their ultimate goal.
Regardless of what stage your fintech project is at, it’s never a bad idea to make sure that everything has been done that can be to eliminate all possible digital security risks to ensure that clients and the business itself are adequately protected.
“There are only two types of companies: Those that have been hacked and those that will be hacked.”
In this article, we’ll go over the key financial cyber security concerns, as well as a list of ten components for putting together an effective system to protect the financial information of both users and the company itself.
Note: In early 2018, PSD2, the amended Payment Services Directive for the European Union, enters into force. Later in this article, we’ll describe the main IT security requirements of this directive. If your company operates in or plans to operate in Europe, we recommend that you familiarize yourself with it and download our checklist.
The main financial cyber security concerns
SQL injection
SQL injection is the kind of digital security threat that involves the introduction of altered SQL queries. Using vulnerabilities in the system’s software implementation, an attacker can execute arbitrary database queries.
Brute force attacks
Brute force attacks attempt to recover a password by automatically guessing from a pool of possible passwords. Using a database of likely passwords (like a dictionary), this process becomes much more efficient.
Zero-day vulnerabilities
Zero-days are unknown vulnerabilities used by hackers before software developers have fixed them. In addition, system administrators don’t always update software in a timely manner causing additional digital security risks.
Man-in-the-middle (MITM) attacks
In a MITM attack, messages being exchanged between the ends of a communication channel are intercepted and spoofed using an unauthorized connection.
Phishing
Phishing is a kind of the greatest financial cyber security concerns nowadays that involves the theft of a user’s information with the help of fake websites and web applications that mimic legitimate resources. Through nefarious means (often a link in an email or another message), users end up at these fake resources and voluntarily enter their login details into forms that look identical to the real ones.
Banking Trojans
This type of malware is aimed at compromising specifically banking cyber security. It gathers account details, collecting stored information about users’ accounts and sending this data to an admin panel. The admin panel, either by automatic rules or manual intervention, chooses a target and displays a fake page to the user.
Ransomware
Ransomware is typically spread through phishing messages. When run, the user is locked out of the system by the malware, which demands a ransom payment.
For 2017, the Open Web Application Security Project (OWASP) identified the following as the most critical web application security risks:
- SQL injection
- Cross-site scripting
- Broken authentication
- Broken access control
- Sensitive data exposure
- Using components with known vulnerabilities
- Security misconfiguration
- Cross-site request forgery
- Unprotected APIs
- Insufficient protection from attacks
| Read also: Credit Card Fraud — Most Common Ways
10 key ways to eliminate these digital security risks
1. Web application firewalls (WAFs)
Most fintech projects provide services through web applications, which are exposed to a number of risks.
A web application firewall, designed specifically for securing web applications, can be used to protect against a variety of financial cyber security threats, including brute-force attacks, session ID spoofing, etc.
A WAF monitors the interaction between client and server during HTTP packet processing. In doing so, it uses predefined rules to detect unauthorized access and block suspicious activity as required.
2. Hardware security modules (HSMs)
The main function of an HSM is to perform cryptographic operations and store digital keys. Using an HSM can reduce the risk of unauthorized data modification to as low as zero. It protects data from attackers who have penetrated external security measures, as well as from dishonest employees.
3. HTTPS-secured connections
HTTPS is an encrypted version of HTTP, not a wholly separate protocol, as some think. The difference is that HTTPS supports encrypted data transfer using the TLS and SSL transport mechanisms. When implemented correctly, this type of connection protects against digital security risks like man-in-the-middle attacks, significantly increasing the security of information transmissions.
| Read also: 10 Basic BYOD Security Rules
4. Creating anti-fraud filters using big data technologies
Companies that provide banking and other financial services manage huge amounts of data that are constantly being generated during the system’s operation. Every customer action or transaction creates a record that’s saved in a database. Analyzing this data allows one to make decisions, take user preferences into account, and manage financial risks. Another possibility in combining big data analysis with machine learning is the tracking and prevention of attackers’ actions. The system must be taught to distinguish normal customer activity from suspicious, fraudulent activity.
5. Multifactor authentication
Usernames and passwords can be intercepted or accidentally entrusted to unreliable people. For these reasons, a username and password alone are insufficient to reliably confirm a user’s legitimacy. Multifactor authentication systems are becoming increasingly widespread. Along with the usual username and password, users are additionally identified not by knowledge (e.g. of a password), but by ownership (e.g. of a device). As a rule, the additional authentication factor is provided by a token, which generates one-time passwords. These may be software tokens (an app on a smartphone) or hardware tokens (separate devices in the form of a key fob or plastic card). It’s much harder for an attacker to control two (or more) authentication factors as opposed to any one factor alone. Some “second” and “third” factors are even unique to a given user (these are biometric methods of information protection) — like your fingerprint, pulse, retina, or face, as in Apple’s Face ID.
“In response to new challenges, Protectimus has developed a powerful means of protection against banking Trojans, injecting, and other types of malicious software that manipulates and modifies data during transactions.”
6. Data signing (CWYS)
Data signing is an effective measure against injections, banking Trojans, and other means of swapping out data during a transaction. The working principle here is that of a one-time password, used for transaction confirmation, which is generated based on the data of the particular transaction being performed by the user at the time. Such “marker” data might include the amount of money being transferred, the currency, the recipient, the client device’s IP address, etc. In this manner, even if the one-time password is intercepted, an attacker cannot use it to sign an illegitimate transaction, as the one-time password will have been generated based on entirely different data.
Continue reading on Protectimus Blog: https://www.protectimus.com/blog/digital-security-risks-fintech/
