By Omar Yaacoubi, CEO, Barac
The financial sector has long been a prime target for cybercriminals. The kudos associated with breaking into a financial organisation, coupled with lure of harvesting and selling on high-value customer data, means the industry finds itself under near-constant attack. According to the Government’s 2018 Cyber Security Breaches Survey, some 57 percent of financial services companies experienced a cybersecurity breach or attack in the previous year. Across all business sectors, the figure was considerably lower, at 43 percent.
Financial firms understand that they are being singled out by the criminal underworld and spend a small fortune protecting their networks from these attacks. Encryption, in particular, has emerged as a key defence. It ensures that, even if a hacker does penetrate a network, they cannot access or make use of the sensitive data.
Moving to the cloud and the introduction of stricter compliance regulations and privacy laws – most notably, GDPR – has accelerated the adoption of encryption solutions. Google estimates that, this year, some 80 percent of internet traffic will be encrypted as organisations attempt to avoid the large fines associated with non-compliance and, of course, protect their sensitive data from external threat actors.
Encryption poses new security risks
While encryption undoubtedly plays a critical role in protecting financial and customer data, its growing popularity has spawned a new risk for the financial sector: encrypted malware.
Just as encrypted traffic makes it harder for hackers to access valuable data, it also makes it more difficult for organisations to identify and block malware. PWC estimates that by the end of 2019, some 60 percent of all malware will be hidden inside encrypted traffic flows. Many organisations have seen this first-hand. A CIO survey by Vanson Bourne found that 90 percent of organisations had experienced – or expect to experience – a network attack using the commonly deployed Secure Sockets Layer (SSL) encryption or its successor, Transport Layer Security (TLS) encryption during the course of this year.
The biggest example is Equifax where hackers used the cover of SSL and encrypted traffic to exfiltrate the valuable data in order to avoid detection by the company’s security tools.
Why encrypted malware is hard to spot
Encrypted malware has become the hacker’s attack vector of choice because traditional security tools have become ineffectual in protecting against it. Simply put, many of today’s popular cybersecurity solutions are unable to see inside encrypted traffic. To check for malicious code, they first have to decrypt all of the network traffic, before performing a scan, re-encrypting it and then forwarding the data packets on to the intended recipient. This process is the most commonly used approach to catch hidden malware, yet it comes with many flaws.
The decryption process is extremely compute intensive and can negatively affect the performance of the network, limiting the capabilities of nearly all firewall and Intrusion Prevention Solutions (IPS) available on the market today. Growing volumes of encrypted traffic mean there are more and more data packets to decrypt, scan and re-encrypt. These increased loads can stop devices from functioning altogether. As a result, some organisations give up following this process, and allow encrypted traffic flows onto their networks without scanning for malware.
The same decryption process could also be placing financial institutions in breach of the very compliance regulations that encryption was deployed to address. In decrypting the traffic, there will be a short period when the data is in plaintext and visible to all, putting a mass amount of sensitive data at risk.
Decryption might not even be technically possible for too much longer. The introduction of the new Transport Layer Security (TLS) 1.3 protocol – which, includes stronger encryption processes in order to prevent hackers from snooping on sensitive data – will also prevent the decryption of traffic to search for malware. Whilst the previous TLS 1.2 protocol allowed for clients and servers to decrypt and scan traffic, the newer version, introduced in August 2018, has stricter regulations meaning this ‘passive mode’ encryption is no longer possible.
New problems require new solutions
Banks need to find alternatives to decryption as a way of protecting against the hidden threat of encrypted malware. While many organisations are aware of the critical importance of investing in new technology for the future, it’s another thing to bite the bullet and adopt these types of solutions. Indeed, Accenture’s 2018 State of Cyber Resilience Report found that although 83 percent of organisations agree that new technology is an essential tool, only two out of five are investing in AI, machine learning and automation technologies.
Yet encrypted malware is one threat that can already be nullified by these new technologies.
Using machine learning techniques and behavioural analytics to scan the metadata of encrypted traffic (rather than the actual contents), new tools are emerging that learn the difference between ‘good’ and ‘bad’ traffic. This provides financial organisations with the ability to block encrypted malware without the need for decryption, all in real-time and with no concerns over compliance or network performance.