Vulnerability Scanning Unveiling Hidden Weaknesses in Fintech Infrastructure

Fintech, short for financial technology, refers to innovative technologies and software applications that aim to improve and automate the delivery and use of financial services. It encompasses a wide range of products, services, and technologies that disrupt traditional financial services, making them more efficient, accessible, and user-friendly.

Fintech streamlines financial processes, reducing paperwork, bureaucracy, and manual interventions. This improves efficiency, reduces costs, and accelerates transactions, benefitting both consumers and businesses. Fintech solutions are often more accessible than traditional financial services. With the proliferation of smartphones and internet connectivity, people can access financial services remotely, anytime and anywhere.

Fintech's importance lies in its ability to democratise financial services, drive efficiency, foster innovation, and improve accessibility while addressing the evolving needs of consumers and businesses in the digital age.

With these benefits in mind there is a growing cybersecurity threat to Fintech organisations.  Being at the intersection of finance and technology, a range of cybersecurity threats are faced by these organisations like those encountered by other sectors, but often with higher stakes due to the sensitive nature of financial data.

Vulnerability scanning is one of many solutions to the cybersecurity threats faced in the Fintech sector. Although it is not a single silver bullet solution, vulnerability scanning offers another layer in a defence in depth approach to security.

Understanding Vulnerability Scanning

Vulnerability scanning is a proactive security technique used to identify and assess weaknesses, security flaws, and potential vulnerabilities within a computer system, network, or application. It involves the systematic examination of systems, looking for known vulnerabilities or misconfigurations that could be exploited by attackers.

The vulnerability scanning process begins with defining the scope and objectives. This includes identifying the assets, systems, or networks to be scanned, setting the parameters for the scan, and establishing the goals of the assessment.

To conduct the scan specialist software and tools are used. These tools can be open-source or commercial and are designed to probe systems for known vulnerabilities.

The scanning tool starts by discovering devices, systems, or applications on the network that are accessible and within the defined scope. It identifies active IP addresses, network services, and available ports to prepare for further analysis. The scan then checks for open ports on devices, which may indicate services or applications running on those ports.  Once open ports are identified, the tool tries to determine the type and version of services running on those ports. This helps in understanding potential vulnerabilities associated with specific services. Using databases of known vulnerabilities, the scanning tool sends specific queries or tests to the target systems to check for vulnerabilities. It can identify outdated software versions, missing security patches, weak configurations, or other known vulnerabilities.

As the scans are executed, the tool collects data on identified vulnerabilities. It categorises and prioritises these vulnerabilities based on severity levels, potential impact, and exploitability.

After the scan completes, a detailed report is generated. This report outlines the vulnerabilities found, their severity, potential risks, and recommendations for remediation.

A vulnerability scan can detect the following types of vulnerabilities:

• Software Vulnerabilities: These include weaknesses in software applications, operating systems, or firmware. Vulnerability scanning tools can identify outdated software versions, missing security patches, and known software vulnerabilities that could be exploited by attackers.
• Configuration Weaknesses: Improperly configured systems or network devices can create vulnerabilities. Vulnerability scanners can detect misconfigurations in settings, such as default passwords, open ports, unnecessary services, weak encryption, or insecure protocols.
• Authentication and Access Control Issues: Vulnerability scanning tools can identify weaknesses in authentication mechanisms, like weak passwords, default credentials, or inadequate access controls, which could lead to unauthorised access.
• Network Vulnerabilities: Scanners can detect vulnerabilities in network devices like routers, switches, firewalls, and intrusion detection systems. This includes issues like unsecured wireless networks, improper firewall configurations, or vulnerabilities in network protocols.
• Web Application Vulnerabilities: For web-based applications, scanners can detect common vulnerabilities such as SQL injection, cross-site scripting (XSS), insecure direct object references, and other flaws that could be exploited through web interfaces.
• Encryption and Cryptographic Weaknesses: Vulnerability scanning tools can identify weaknesses in encryption protocols or implementations, including outdated cryptographic algorithms, improper key management, or weak SSL/TLS configurations.
• Misuse of Privileges: They can detect instances where users have excessive or unnecessary privileges, potentially leading to misuse or abuse of those privileges.
• Third-Party Software Vulnerabilities: Many vulnerabilities arise from using third-party software or libraries. Scanners can detect vulnerabilities within these dependencies, helping organisations address risks associated with third-party components.
• Compliance and Policy Violations: Vulnerability scanning tools can also identify deviations from regulatory compliance requirements or internal security policies.

It is important to perform regular vulnerability scans as cyber threats evolve rapidly. Regular scans help detect new vulnerabilities that might have emerged since the last scan, ensuring that your systems are protected against the latest threats.

Vulnerabilities are potential entry points for attackers. Regular scanning allows organisations to proactively identify and fix these weaknesses before they can be exploited by malicious actors. Threat actors are regularly looking for opportunities to exploit vulnerabilities and even the slightest lapse can introduce an opportunity for them to breach into an organisation.

Significance in Fintech Security

Financial data is highly sensitive and is therefore a prime target for threat actors. Data such as bank account details, transaction records, and personal identification data can be extremely valuable to thread actors. Regular vulnerability scans help identify and mitigate vulnerabilities that could lead to unauthorised access or data breaches.

Any security breach or compromise can significantly damage trust and reputation. Regular vulnerability scans demonstrate a commitment to security, reassuring customers that their financial information is protected, thus preserving trust in the brand.

Fintech companies are often subject to strict regulatory requirements, such as GDPR, PCI DSS, or other financial industry-specific standards. Regular vulnerability scanning helps ensure compliance with these regulations, avoiding hefty fines and legal repercussions.

Examples of Fintech breaches due to undiscovered vulnerabilities include:

Equifax 2017 – Equifax's web application was affected by CVE-2017-5638, a critical vulnerability in Apache Struts. Attackers exploited this flaw to gain unauthorised access to sensitive personal data of millions of individuals.

Finastra 2020 – A ransomware attack on Finastra was speculated to be caused by an exposed Pulse Connect Secure vulnerability CVE-2019-11510.

ONUS 2021 – The Vietnamese ONUS cryptocurrency platform was exposed to a cyberattack due to the Log4J CVE-2021-44228 vulnerability running on a Cyclos server.

Hatch Bank 2023 - More recently the Fintech banking platform Hatch Bank reported a data breach in 2023 where hackers stole information of almost 140,000 customers. This was due to a vulnerability in the Forta GoAnywhere software - CVE-2023-0669.

Security regulatory requirements for Fintech security can vary based on the region, the type of financial services provided, and the specific activities of the company. However, several overarching regulations and standards commonly apply to ensure security, privacy, and compliance within the fintech industry. Here are some key regulatory requirements:

• General Data Protection Regulation (GDPR): GDPR is a comprehensive data privacy regulation applicable to companies handling personal data of EU citizens. Companies dealing with European customers or operating within the EU must comply with strict requirements regarding data protection, consent, data transfer, and reporting of data breaches.
• Payment Card Industry Data Security Standard (PCI DSS): This standard mandates secure handling, storage, and transmission of cardholder data to prevent fraud and data breaches.
• Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) Regulations: These regulations aim to prevent money laundering, fraud, and terrorist financing by implementing robust customer identification, transaction monitoring, and reporting mechanisms.
• Cybersecurity Requirements (e.g., NIST Cybersecurity Framework): These frameworks, such as NIST Cybersecurity Framework in the US, outline best practices and recommendations for managing cybersecurity risks in financial institutions and fintech companies.
• Electronic Transactions Act and Digital Signature Laws: Fintech companies dealing with electronic transactions, digital signatures, or e-commerce may need to comply with specific laws that govern electronic contracts, digital signatures, and online transactions.
• Regulatory Sandbox Requirements: Some jurisdictions offer regulatory sandboxes allowing fintech companies to test innovative products and services in a controlled environment. Compliance with sandbox regulations is essential for participating fintech firms.
• Consumer Protection Regulations: Fintech companies handling consumer financial data or providing financial services to individuals need to comply with consumer protection regulations. These regulations often focus on transparency, fair practices, and dispute resolution mechanisms.
• RegTech Compliance Solutions: In some cases, regulatory technology (RegTech) solutions are mandated or encouraged to facilitate compliance monitoring, reporting, and adherence to regulatory requirements.
• Digital Operational Resilience Act (DORA): DORA is an EU regulation expected to go live in 2025 that aims to strengthen the financial sectors resilience against ICT risks. The DORA Regulation establishes uniform requirements for the security of networks and information systems supporting the business processes of financial entities, while requiring full alignment and overall consistency between their business strategies and ICT risk management.

Identifying Potential Entry Points

Breaches can occur through various entry points due to complex interconnected systems and the sensitive nature of financial data. Some common entry points targeted by attackers include:

• Web Applications and APIs: Vulnerabilities in web applications or APIs can be exploited by attackers to gain unauthorised access to financial data. Flaws like SQL injection, cross-site scripting (XSS), or insecure direct object references can compromise user accounts or expose sensitive information.
• Unsecured Interfaces and Integrations: Fintech platforms often integrate with third-party services or banking systems. Weaknesses in these integrations, such as insecure APIs or misconfigured connections, can become entry points for attackers to access sensitive financial data.
• Unpatched or Outdated Software: Failing to apply security patches or updates promptly can leave fintech systems vulnerable to exploitation through known vulnerabiliThird-Party Vulnerabilities:ties in software, operating systems, or applications.

Fintech companies often rely on third-party vendors or service providers. Vulnerabilities in the systems or software provided by these third parties can be exploited to gain access to fintech networks or data.

Regular vulnerability scanning can proactively help pinpoint these entry points by:

• Reporting the detection of a recently discovered vulnerability in a service. Using a database of known vulnerabilities and attack signatures, vulnerability scanners send specific tests or probes to target systems. These tests are designed to check for known vulnerabilities, weaknesses in software, misconfigurations, or insecure settings that attackers might exploit.
• Vulnerability scanners detect outdated software versions or missing security patches. They compare the versions running on systems against known vulnerabilities to highlight potential risks associated with unpatched software.
• Once the scans are complete, vulnerability scanners provide detailed reports categorising vulnerabilities based on severity levels, potential impact, and exploitability. This prioritisation helps fintech organisations focus on addressing the most critical weaknesses first.
• Some vulnerability scanning tools offer continuous monitoring capabilities. They continuously assess the network, detect new devices or changes, and scan for emerging vulnerabilities to maintain an up-to-date view of the security landscape.

Reactive security measures pose several risks for any organisations:

• Increased Vulnerability Window: Reactive security measures often involve responding to security incidents after they occur. This delay between the occurrence of a breach or vulnerability and its detection and response creates a larger window of vulnerability, allowing attackers more time to exploit weaknesses.
• Higher Potential for Damage: Delayed detection and response can result in greater damage from security incidents. Attackers may have already compromised systems, stolen sensitive data, or caused disruptions before the breach is identified and mitigated.
• Loss of Trust and Reputation: Security incidents, especially if they lead to data breaches or service disruptions, can erode customer trust and damage the reputation of a company. Customers may lose confidence in the company's ability to protect their sensitive financial information.
• Regulatory Consequences: Reactive measures might result in non-compliance with regulatory requirements. Failure to promptly address security incidents or breaches in line with regulatory standards can lead to fines, penalties, and legal consequences for non-compliance.
• Financial Impact: Security incidents can have significant financial implications. Remediation costs, legal fees, fines, loss of business, and potential compensation to affected customers can amount to substantial financial losses for the company.
• Resource Drain: Reactive security measures often demand significant resources in terms of time, manpower, and costs. Dealing with incidents after they occur requires more effort compared to proactive measures aimed at prevention and early detection.
• Limited Prevention and Preparedness: Relying solely on reactive measures limits the organisation's ability to proactively prevent security incidents. A lack of preventive measures and preparedness plans may leave the company ill-equipped to handle future threats effectively.
• Potential for Repeat Incidents: Failing to address underlying vulnerabilities proactively can result in repeated security incidents. If root causes are not identified and resolved, similar incidents may occur, leading to a cycle of reactive responses.

Vulnerability scanning plays a crucial role in incident response by helping organisations prepare, identify, and respond to security incidents effectively. Here are some integration benefits:

• Preparation and Planning: Vulnerability scanning provides valuable insights into potential weaknesses and vulnerabilities within an organisation's systems and networks. This information is used in incident response planning to prioritise resources, define response procedures, and establish protocols for addressing identified vulnerabilities.
• Early Detection: Regular scanning helps in the early detection of potential weaknesses or vulnerabilities that attackers might exploit. When anomalies or vulnerabilities are identified, they can trigger incident response actions to investigate and mitigate the risks before they are exploited.
• Incident Identification and Classification: When a vulnerability scan detects an anomaly or a potential breach, it can trigger incident response protocols to investigate further and determine if it constitutes an actual security incident.
• Response Prioritisation: Vulnerability scanning reports prioritise vulnerabilities based on their severity and potential impact. This aids incident responders in prioritising their efforts and resources towards addressing critical vulnerabilities that pose immediate risks to the organisation.
• Support for Remediation: Vulnerability scanning reports provide specific information about identified weaknesses, including affected systems, potential attack vectors, and recommended fixes. This information assists incident response teams in quickly understanding and implementing remediation measures to address vulnerabilities and prevent exploitation.
• Continuous Monitoring and Validation: After an incident is resolved, vulnerability scanning continues to play a role in validating the effectiveness of implemented fixes or patches. Ongoing scans ensure that vulnerabilities have been successfully addressed and that systems remain secure post-incident.
• Improvement of Incident Response Processes: Insights gathered from vulnerability scans can be used to refine incident response processes. Organisations can learn from vulnerabilities discovered during scans to enhance incident response strategies, update policies, and improve security measures to prevent similar incidents in the future.
• Reduced attack surface: Continuous scanning reduces an organisation’s attack surface considerably.

Elevating Cyber Resilience in Fintech

Incorporating vulnerability into your cybersecurity strategy involves the following:

• Assessment of Current Security Posture: Understand your systems, networks, and critical assets to identify potential vulnerabilities and areas of weakness.
• Objectives and Scope: Clearly define the objectives of vulnerability scanning within your cybersecurity strategy. Determine the scope of the scanning, such as the systems, applications, networks, or specific assets you want to assess.
• Select Suitable Vulnerability Scanning Tools: Choose reliable and appropriate vulnerability scanning tools or software based on your organisation's needs. Consider factors such as the scale of your infrastructure, types of systems, frequency of scanning, and reporting capabilities.
• Establish a Scanning Schedule: Develop a regular scanning schedule that aligns with your organisation's operational needs. Determine the frequency of scans, whether they'll be conducted daily, weekly, monthly, or in response to system changes or updates.
• Risk Prioritisation and Remediation: Prioritise vulnerabilities based on their severity, potential impact, and exploitability. Develop a systematic approach to address identified vulnerabilities, including applying patches, implementing security measures, or mitigating risks.
• Documentation and Reporting: Document vulnerability scanning processes, findings, and remediation actions taken. Maintain detailed reports for compliance, audit purposes, or as a reference for future assessments.
• Incorporate scanning into the development lifecycle: Perform vulnerability scans on new software releases to ensure that new vulnerabilities have not been introduced due to change. This includes introducing third party dependencies or software that have known vulnerabilities.
• Employee Training and Awareness: Educate and train relevant personnel on the importance of vulnerability scanning, interpreting scan results, and taking necessary actions to address identified vulnerabilities.

Ensuring Data Privacy and Compliance

Vulnerability scanning plays a role in aligning with both the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) by contributing to data protection and security measures:

GDPR

Security Measures (Article 32): GDPR mandates that organisations implement appropriate technical and organisational measures to ensure the security of personal data. Vulnerability scanning is a proactive security measure that helps in identifying weaknesses in systems, networks, and applications that could lead to data breaches. By regularly scanning for vulnerabilities, organisations can demonstrate their commitment to securing personal data.

Data Protection Impact Assessments (DPIA - Article 35): Conducting DPIAs is required in certain cases involving high-risk data processing activities. Vulnerability scanning can be part of this assessment, helping organisations identify potential risks to personal data and take necessary actions to mitigate those risks.

Incident Response (Article 33): In the event of a data breach, organisations must notify the supervisory authority and affected individuals within a specific timeframe. Vulnerability scanning contributes to incident response by helping detect vulnerabilities early, allowing for timely remediation to prevent potential breaches, thereby reducing the likelihood of mandatory breach notifications.

CCPA

Reasonable Security Measures (Section 1798.150): The CCPA requires businesses to implement reasonable security measures to protect consumer data. Vulnerability scanning serves as a proactive measure to identify and address security weaknesses, aligning with the requirement to maintain appropriate security safeguards.

Data Breach Response (Section 1798.150): Similar to GDPR, CCPA requires businesses to have incident response plans in place in case of a data breach. Vulnerability scanning contributes to early detection and response to potential vulnerabilities, reducing the risk of data breaches and aligning with the requirement to have effective response measures.

Both GDPR and CCPA emphasise the importance of implementing security measures to protect personal data and respond effectively to security incidents. Vulnerability scanning is a proactive approach that aids organisations in identifying, prioritising, and mitigating security risks, thereby aligning with the regulatory requirements for data protection and security.

Penetration testing and vulnerability scanning are complementary security practices, each offering distinct benefits. When used together, they contribute to a more robust and comprehensive cybersecurity strategy.

Vulnerability scanning and penetration testing work together to provide a comprehensive view of an organisation's security posture. While vulnerability scanning identifies potential weaknesses, penetration testing validates their exploitability and provides actionable insights to strengthen security defences. The combination of these practices helps organisations proactively manage and mitigate cybersecurity risks.

Best Practices for Effective Vulnerability Scanning

By adhering to the following these best practices, organisations can conduct effective vulnerability scanning, identify potential risks, and take proactive steps to mitigate vulnerabilities, thereby strengthening their overall cybersecurity posture:

Regular Scanning: Schedule regular scans to ensure continuous monitoring of your systems and networks. This helps in detecting new vulnerabilities, system changes, and potential risks that might emerge over time.

Comprehensive Coverage: Ensure that vulnerability scanning covers all relevant systems, networks, applications, and devices within your environment. Consider both internal and external scans to assess the entire attack surface.

Prioritise Assets: Identify critical assets and prioritise scanning for these systems. Focus on high-value or sensitive data-bearing systems to address their vulnerabilities promptly.

Stay Updated: Keep vulnerability scanning tools and databases up to date. Regularly update the scanning tools to include the latest vulnerability definitions, patches, and security checks.

Perform Authentication-Based Scans: Conduct scans with authenticated access whenever possible. Authenticated scans provide deeper insights by allowing the scanner to access system configurations, patches, and user privileges, leading to more accurate results.

Integration with Incident Response: Integrate vulnerability scanning results with incident response processes. Develop clear procedures for responding to critical vulnerabilities or security incidents identified through scanning.

Documentation and Reporting: Document scanning procedures, findings, and remediation actions taken. Maintain detailed reports for compliance, audit purposes, or as a reference for future assessments.

Continuous Improvement: Continuously evaluate and refine your vulnerability scanning processes. Learn from scanning results, adapt to emerging threats, and update scanning methodologies accordingly.

Conclusion

Given the high stakes involved in handling financial data, maintaining regulatory compliance, and ensuring customer trust, vulnerability scanning becomes a vital component of the overall cybersecurity strategy for fintech companies. It enables proactive identification and remediation of vulnerabilities, reducing the risk of data breaches and financial losses.

For Fintech organisations it is important to add vulnerability scanning if it is not already in place. Cybersecurity is a rapidly changing area with new threats discovered every day so it is vital to ensure that action is taken to protect the financial data being handled.

Further information on this topic:

• Industry reports from cybersecurity firms often provide insights into vulnerabilities and security practices specific to the finance sector. Companies like Kaspersky, Symantec, and McAfee regularly publish reports on cybersecurity trends in financial services.
• Government cybersecurity agencies and financial regulatory bodies often provide guidelines, reports, or resources specific to cybersecurity practices, including vulnerability scanning, for the finance sector. Check resources from bodies like the Federal Financial Institutions Examination Council (FFIEC) or the European Banking Authority (EBA).