What Is Application Security?

Application security is defined as a set of steps that developers take to identify, fix, and prevent security vulnerabilities at various stages of the software development life cycle (SDLC). From development to testing to post-deployment review, application security considers the entire application environment and adds controls that can help prevent security breaches. These controls range from application design reviews, to automated code scanning, to post-deployment testing.

To effectively protect against attacks, an effective application security framework requires a combination of tools and practices. These can help identify, remediate, and prevent security vulnerabilities throughout the application development lifecycle. By preemptively fixing vulnerabilities, security teams improve the security posture of applications, mitigating threats before they can be exploited in production.

Modern software development is primarily about agility, and most efforts are focused on simplifying CI/CD pipelines. Application security, on the other hand, seamlessly integrates security into development and operations workflows to build secure applications while keeping development overheads low.

Application Security Risks in the Finance Industry

Regulation

Financial institutions are highly regulated and closely monitored. Processes, systems and applications must be managed, documented and reported on a regular basis.

Regulations and directives such as Health Insurance Portability and Accountability Act (HIPAA) in the US, the California Consumer Privacy Act, the EU Cyber and Information Security Directive, and the General Data Protection Regulation (GDPR), are particularly stringent on records containing personal data. Additionally, the Payment Card Industry Data Security Standard (PCI-DSS) is another important standard governing any organization that accepts, processes, stores or transmits credit card information to maintain a secure environment.

Restrictions also apply to third-party components. Financial institutions are responsible for ensuring that their software vendors comply with standards and regulatory requirements. This means that financial institutions must manage software projects carefully and thoroughly document them. This affects all aspects of the DevSecOps pipeline such as development, release, deployment, and operational processes.

Data Theft

Financial apps handle valuable data, including sensitive personal identifiable information (PII) like passwords, names, and payment card information. Once compromised, financial apps can allow threat actors to access this information. Mobile banking trojans like Ghimob and Anubis and various mobile malware employ sophisticated techniques to exfiltrate overlay screens and keyloggers and exploit accessibility services.

Intellectual Property Theft

Many applications include patented technology and proprietary algorithms. Threat actors can discover this intellectual property using reverse engineering techniques. For example, threat actors that reveal IPs can sell valuable knowledge assets to competitors or use them to make counterfeit financial apps containing various malware like banking trojans.

Loss in Customer Confidence

Cybersecurity breaches often lead to a loss of customer confidence. Research indicates that US-based consumers (83%) are likely to stop doing business with a firm affected by a cybersecurity breach for several months, while UK-based customers (40%) are likely to stop doing business indefinitely.

Additionally, gaining new customers after a cybersecurity breach costs more due to the extra marketing spend required to repair brand reputation and business model changes like increased product discounts or lower service rates.

Security Requirements Considerations for Financial Applications

Security is the most important feature to provide when developing and launching a financial application. Everyone who uses the application, including internal team members, consumers, partners, and third-party vendors, must be assured that the information stored, managed, and accessed through the application is protected at all times.

Authentication

Authentication is a fundamental security feature implemented in many applications, including finance apps. The authentication process verifies the identity of any user attempting to access the app. Common authentication methods include passwords, which can be set by each user or generated by the system. 

Most financial applications add a layer of security using two-factor authentication (2FA) or multi-factor authentication (MFA). It requires each user to input their username and password and add another factor, such as a temporary code sent via SMS, email, or an authenticator app.

Single Session Sign-On

Financial applications usually do not allow multiple sessions because it creates a security risk. Single session sign-on ensures that only one authorized user can access an account at a given time, and the session ends once the user logs out or the system logs them out. 

Encryption 

Information stored within the system must always be encrypted and protected. Bank-grade encryption uses 256-bit AES encryption and SSL technology to secure data in transit. This is the same level of encryption that the US government uses to transmit sensitive information.

A secure HTTPS endpoint should be used whenever information is transmitted over a public network. Organizations should also encrypt databases and other stored data at rest.

Secure Hosting

Every financial application should ideally run in a separate, isolated environment. Besides scalability, this means that applications are isolated from others and do not share a backend, database, or runtime with other applications. Each application environment runs in its own separate process, memory, and file system. This eases security efforts and limits the blast radius of successful attacks.

Have an Incident Response Plan in Place

Plan a rapid response for when cyber attacks occur. An incident response plan is designed to provide teams with the tools and procedures they need to identify, remove, and remediate attacks. Your plan should also include a communications strategy outlining how to communicate with users, other stakeholders, and the authorities, if accounts are determined to be compromised.

Conclusion

In conclusion, the finance industry faces a number of unique security challenges and risks. These can include financial fraud, cyber attacks, insider threats, and regulatory compliance issues. 

To address these risks, organizations in the finance industry should implement robust security measures, such as encryption, access controls and having an incident response plan. By taking these steps, organizations in the finance industry can protect themselves and their customers from the various security risks they face.