One alarming trend in the fintech industry is the sharp increase in application attacks.
According to recent reports, 64% of financial institutions (FIs) have seen a rise in application attacks, including Class Loader manipulation and Expression Language Injection. These types of attacks exploit vulnerabilities in application class loaders and web application frameworks like Spring Boot, potentially leading to remote code execution (RCE) and data breaches.
To mitigate this risk, fintech companies should conduct regular and thorough security assessments before implementing new technologies. This includes keeping up-to-date with the latest vulnerabilities and security best practices for the technologies being used, and implementing necessary controls to safeguard against potential attacks. Collaborating with cybersecurity experts and staying informed about the latest trends and threats in the industry can also help fintech companies proactively identify and address potential vulnerabilities in applications, ensuring that they are implemented securely and do not pose additional cybersecurity risks.
Integrity or destructive attacks are another significant cybersecurity risk facing the fintech industry. These types of attacks are launched with the intent to destroy data, and 60% of FIs have reported being victimized by such attacks. In some cases, ransomware may be accidentally turned into data wiper malware, leading to irreversible data loss. However, in other cases, attackers deliberately choose to overwrite files with pseudo-randomly generated data, as seen in recent attacks like CryWiper.
These attacks are often motivated by cyber warfare or geopolitical tensions, and can result in severe financial and reputational damage to victim organizations. To mitigate this risk, fintech companies should implement robust data backup and recovery procedures, encrypt sensitive data, and implement strict access controls to prevent unauthorized modifications to critical systems and data. Regular security audits and monitoring can also help detect and respond to integrity or destructive attacks in a timely manner.
Watering-hole attacks are a type of cyberattack where attackers hijack and poison a website or mobile app used by e-finance customers, aiming to gain unauthorized access to sensitive information. Recently, 60% of FIs have reported being targeted by watering-hole attacks. For example, a fake video chat service website was used to target Android users with a Trojanized version of the Telegram app.
To defend against watering-hole attacks, fintech companies should implement strict security measures to protect their websites and mobile apps. This includes regular vulnerability scanning and patching, implementing web application firewalls (WAFs), and using multi-factor authentication (MFA) to ensure that only authorized users can access sensitive systems and data. Employee training and awareness programs can also help prevent users from falling victim to phishing attacks, which are often used as an entry point for watering-hole attacks.
API Attacks on the Rise
The shift to new development approaches such as microservices architecture has led to an explosion in application programming interfaces (APIs), which are increasingly targeted by cybercriminals. Recent reports show that 50% of FIs have experienced attacks against their APIs.
To mitigate the risk of API attacks, fintech companies should implement strong authentication and authorization mechanisms for APIs, including the use of API keys, OAuth, and JWT (JSON Web Tokens). API access should be restricted based on the principle of least privilege, ensuring that each API endpoint grants only the specific permissions necessary for the intended function. Regular security audits, monitoring for unusual activities, and employing encryption protocols are also vital components in safeguarding the integrity and confidentiality of sensitive data accessed through APIs.
Island hopping, a serious and growing threat, is another challenge that the fintech industry faces in terms of cybersecurity. While island hopping attacks are not new, they remain a significant problem as cybercrime cartels have become proficient in understanding the interdependencies of financial institutions’ supply chains. In island hopping attacks, attackers infiltrate the corporate environment through application attacks or API attacks and then use that access to launch attacks against the customer base. Cybercriminals often target trusted suppliers, such as managed service providers (MSPs) or external firms, to gain access to the systems of their primary target, which could be a financial institution or another business.
In fact, there has been a significant increase in island hopping attacks, with 58% of financial institutions reporting that they have been victimized by such attacks. Island hopping attacks pose not only operational and financial risks but also reputational risks to the victim organizations. To mitigate this risk, financial institutions should carefully assess the security posture of their suppliers and partners, implement strong access controls, and continuously monitor for any signs of compromise or suspicious activity in their supply chains.
There are many more common attacks that are worth mentioning:
- Cross-site Scripting (XSS) Attack: Exploits vulnerabilities to inject malicious code, enabling hackers to control HTTP requests and access sensitive information, like PII and financial data.
- Broken Access Control Attacks: Occur when users breach application borders, accessing administrative areas and risking exposure of user credentials and application infrastructure.
- SQL Injection Attack: Manipulates SQL statements to gain unauthorized access to a system, evading security measures and allowing hackers to control the software environment.
- Session Hijacking Attacks: Tamper with session IDs to access and manipulate information passing through servers during a specific user session, potentially acquiring user credentials for personal account access.
- Path Traversal Attacks: Target the root directory, tricking applications into granting access to critical server files, including user credentials and sensitive system data.
The implications of these attacks are severe:
- Financial Impact: Data breaches from these attacks cost millions of dollars. Breached sensitive data leads to loss of user trust and confidence in the affected brand.
- Operational Disruption: Application attacks cause downtime, resulting in lost productivity, revenue, and potentially affecting customer loyalty.
Overall, application attacks pose significant risks, leading to financial losses, damage to brand reputation, and operational disruptions, making them a critical concern for organizations.
Overcoming the Challenges
The fintech industry and fintech applications face numerous cybersecurity risks and challenges that require proactive measures to safeguard against potential attacks. These risks include application attacks, integrity/destructive attacks, watering-hole attacks, API attacks, and island hopping attacks.
To overcome these challenges, fintech companies should prioritize cybersecurity and implement robust security measures, including regular security assessments, staying up-to-date with the latest vulnerabilities and security best practices, implementing necessary controls, collaborating with cybersecurity experts, and staying informed about the latest trends and threats in the industry.
By taking a proactive and comprehensive approach to cybersecurity, fintech companies can protect their systems, data, and customers from cyber threats and ensure the integrity and security of their operations in the rapidly evolving landscape of fintech. With the right cybersecurity measures in place, the fintech industry can continue to drive innovation, create value, and deliver convenient and secure financial services to their customers. Remember, cybersecurity is not an option but a critical necessity in the world of fintech.
Cybersecurity threats are constantly evolving, and it’s crucial to stay updated with the latest security best practices and technologies to effectively mitigate risks. Schedule a free consultation today with one of our fintech security experts.
Stay vigilant, stay secure!