SecurityBrief New Zealand logo
New Zealand's leading source of cybersecurity and cyber-attack news
Story image

How open banking benefits customers, banks – and cybercriminals

By Contributor
Tue 18 Jan 2022

Article by Radware, Prakash Sinha.

Australia is progressing steadily with an open banking rollout. The Big Four banks — CBA, Westpac, ANZ and National Australia Bank — introduced open banking in July 2021, and other banks and financial services are expected to follow in 2022. However, according to many fintechs, the introduction is going slower than expected, and they are pushing financial markets to open their banking services online by signing additional data holders.

While open banking benefits banks, fintechs, and consumers, its promise to deliver innovative services and spur competition does not come without security cautions.

Unlike traditional banking, where the parent bank controls all customer data, in open banking, customer data is securely exposed to third-party providers via application program interfaces (APIs) when the customer provides consent. The sharing of that data, in turn, creates a broader threat surface that must be protected against cyber abuse and malice.

So can open banking be secure? The answer is yes; there is a way forward for a secure future for open banking.

Open banking benefits

The benefits of open banking for consumers are clear.

Open banking makes it easier for consumers to shop around for financial products and services. Rather than suffering the tedious process of contacting each lender separately, consumers can give a group of banks temporary permission to audit their financial history and risk profile. What they get in return is faster, more personalised, and more competitive quotes from lenders — and a much easier way to compare product offers.

Open banking also offers advantages to banks and lenders. According to Finextra, banks have four major advantages: increased collaborative opportunities, greater ability to make foresighted decisions, heightened customer satisfaction and improved digital agility. 

The security implications

Clearly, open banking offers valuable service benefits and conveniences. There are, however, perils for the unwary, and some consider the technology to be a significant threat.

So what are the security implications of open banking?

As mentioned, the process opens customers’ data to external third-party providers via published open APIs. Easy-to-build and easy-to-consume APIs speed-up application development while enabling the sharing of sensitive data between systems. According to a Radware survey, more than half of applications in nearly two-fifths of organisations are exposed to the Internet or third-party services via APIs.

The challenge is that many organisations fail to maintain the same security practices for mobile applications as they do for web applications. So, while APIs bring tremendous benefits, they also introduce availability and security concerns that consumers and financial institutions alike must be aware of. This includes:

Service disruption: Dependence on third-party APIs and components may lead to unintended service disruptions if API services are unavailable due to security, network and application configuration errors, API denial of service attacks, or application or authentication infrastructure outages.

Trust issues: Many solutions for open banking are built on cloud-only or hybrid infrastructures. However, according to the company report, migration to public clouds creates trust issues. These include incompatibility of security solutions, configuration challenges across different environments, misconfigurations, and application security policies and profiles issues. 

Increased attack surface: API attacks are not uncommon. A survey by my company revealed that 55% of organisations experience a DoS attack against their APIs at least monthly, 48% receive some form of injection attack at least monthly, and 42% experience an element/attribute manipulation at least monthly.

Other attacks include API authentication and authorisation attacks, embedded attacks such as SQL injection, cross-site scripting (XSS), and bot attacks.

Bot attacks on APIs: Bot attacks are human-like automated programs scripted to break into user accounts, steal identities, initiate payment fraud, scrape content such as pricing or data, spread spam, and impact legitimate business activities.

Data theft: Many APIs process sensitive, personally identifiable information (PII). The combination of sensitive and confidential information coupled with the lack of visibility into how these APIs and third-party applications operate is a security nightmare in the case of a breach.

Undocumented but published APIs: Undocumented APIs may accidentally expose sensitive information if not tested and may be open to API manipulations and vulnerability exploits.

Because threats vary, API security requires a combination of security controls. This includes API access controls for authentication, authorisation, and access management. It also includes detecting and preventing:

  • Bot attacks on APIs
  • API manipulations
  • DDoS and availability attacks
  • Embedded attacks
  • API vulnerabilities
  • Leakage of PII data and excessive data exposure
  • Fraud and phishing scams

How to secure open banking: the basics are not enough

When building a comprehensive and effective security solution for open banking, the “basics” are no longer enough. Gartner predicts that by 2022, API attacks will become the most-frequent attack vector, causing data breaches for enterprise web applications.

A sound security strategy must provide full support for the OWASP Top 10, bot management, API security, DDoS protection, solution scalability and availability, and threat intelligence. Each component has an important role to play.

OWASP Top 10: OWASP Top 10 is an online document that provides a ranking of and remediation guidance for the top 10 most critical web application security risks. The report, which is based on a consensus among security experts worldwide, helps organisations prioritise which risks to focus on and which vulnerabilities to fix in their technology.

Bot management: A bot manager defends APIs against automated attacks and ensures that only legitimate users and devices can access the APIs while blocking any attempt to reverse engineer mobile software development kits.

DDoS protection: APIs need to be protected against attacks using a flood of requests to slow or disrupt a service or gain access to databases. Many DDoS attacks, frequently using SSL, focus on rendering the web application layer unreachable, causing a denial-of-service state. A maliciously designed HTTP request can lead the web or application server to execute many internal requests that can consume all its resources.

Defence and cloud DDoS applications: Guarding against ever-evolving cyber threats requires comprehensive automated DDoS protection that continuously adapts to offer the fastest threat detection and mitigation.

Cloud security posture and cloud infrastructure entitlement management: Migrating application workloads to the public cloud creates new threat surfaces that, if left unsecured, can be exploited by attackers and lead to theft of customer data. 

Multi-layered protection for application infrastructure and workloads: It’s important to secure the cloud environment against identity and access abuse and malicious user behaviour and protect the overall security posture of the public cloud environment.

Reverse proxy or application delivery controller (ADC): In an API-driven world, ensuring application SLAs is critical for ensuring the digital experience. ADCs are the foundation for keeping applications and their environments secure, scalable and available. ADCs enable support for the mutual transport-level security (mTLS) requirement to connect banks to authorised third-party applications securely.

Web application and API protection (WAAP): As modern applications are built on REST APIs, a layered approach is needed for the complete protection of APIs against injections, scripting, parameter manipulations, protocol attacks, and data theft. The same capabilities used for applications apply to APIs as well. WAAP helps protect both applications and APIs from data leakage, API vulnerabilities, and API manipulations while protecting undocumented APIs.

Ultimately, the benefits of open banking, shared by both banks and customers, are dependent on comprehensive security strategies. Only with a multi-layered safety net will banks and fintech be able to thrive in this environment and deliver solutions that build customer trust — while keeping cybercriminals at bay. 

Related stories
Top stories
Story image
Tech job moves
Tech job moves - Adatree, Brother, Databricks, Nutanix & Rubrik
We round up all job appointments from May 20-26, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Cybersecurity
Could New Zealanders initiate a cyber attack from within?
The threat landscape is significantly increasing worldwide, and the opportunities it presents are a growing concern in Aotearoa.
Story image
PIJF
The path to bolstering supply chain security in New Zealand
A significant amount of today's business and leisure activity relies on IT supply chains. From complex international freight trades to local small business distribution channels, any supply chain that involves IT infrastructure serves as a crucial tool in our daily lives. 
Story image
Microsoft
Microsoft NZ and TupuToa to boost diversity in cybersecurity sector
Microsoft NZ has teamed up with TupuToa to co-develop a cyber security employment programme specifically aimed at creating more diversity in Aotearoa's cybersecurity sector.
Story image
Employment
Tech job moves - Forcepoint, Malwarebytes, SolarWinds & VMware
We round up all job appointments from May 13-20, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
New Relic
New Relic launches vulnerability management platform
New Relic has introduced New Relic Vulnerability Management to help organisations find and address security risks faster and with greater precision.
Story image
Data Protection
Barracuda launches new capabilities for API Protection
"Every business needs this type of critical protection against API vulnerabilities and automated bot attacks," Barracuda says.
Story image
Ransomware
CERT NZ releases first Cyber Security Insights for 2022
CERT NZ has released Quarter One: Cyber Security Insights 2022, which offers an overview of reports about cybersecurity incidents affecting New Zealanders.
Story image
Managed service provider
Barracuda MSP Day 2022 highlights MSP opportunities
Barracuda Networks has released a report showing global services-related MSP revenue is set to increase by more than a third in 2022 compared to 2021.
Story image
Training
Trojan cyber attacks hitting SMBs harder than ever - Kaspersky
In 2022 the number of Trojan-PSW detections increased by almost a quarter compared to the same period in 2021 to reach 4,003,323.
Story image
Silver Peak
The path to an adaptive, modern network
Managing and securing the network looks different than it did just two years ago—especially given that most of these networks are made up of multi-generations of infrastructure stitched together over time.
Story image
Phishing
WhatsApp and QR codes the next scam threat - report
KnowBe4 has warned it expects to see an increase in QR Codes and the WhatsApp chat platform being used for phishing and other scams. 
Story image
Cybersecurity
Accenture - a collective security approach a driving factor for cyber resilience
With the approaching Davos World Economic Forum upon us, it is even more imperative to discuss the impact of cybersecurity on business operations leading into the future.
Story image
Cybersecurity
Asia Pacific plagued by sophisticated bad bots - report
The three most common bot attacks were account takeover, content or price scraping, and scalping to obtain limited-availability items.
Story image
Cybersecurity
Comcast to use ThreatQuotient for cybersecurity operations
Comcast, the parent company of NBC Universal and SKY Group, has chosen ThreatQ Platform and ThreatQ Investigations to meet their cybersecurity needs.
Story image
Malware
Fortinet introduces self-learning AI in latest offering
Fortinet is introducing self-learning AI capabilities in its new network detection and response offering, FortiNDR.
Story image
Migration
Let’s clear the cloud visibility haze with app awareness
Increasingly, organisations are heading for the cloud, initiating new born-in-the-cloud architectures and migrating existing applications via ‘lift and shift’ or refactoring.
Story image
SaaS
Maintaining secure systems with expectations of flexible work
Most office workers feel they've proved they can work successfully from home, and as much as employers try, things aren't going back to the way they were anytime soon.
Story image
Cybersecurity
More than 40% of banks worried about cloud security - report
Publicis Sapient's new report finds security and the lack of cloud skills and internal understanding of business benefits are big obstacles for banks moving to the cloud.
Story image
Training
Infosec unveils role-guided cybersecurity training roadmaps
Infosec Skills Roles maps hands-on training and certifications to the 12 most in-demand cybersecurity roles to maximise training efficiency.
Story image
Transport
Third-party automotive apps bear significant privacy risks
Mobile applications for connected cars provide various features to make life easier for motorists, but they can also be a source of risk.
Story image
ChildFund
ChildFund launches new campaign to protect children online
ChildFund says WEB Safe & Wise aims to protect children from sexual exploitation and abuse online while also empowering them to become digitally savvy. 
Story image
Cyber attacks
Devastating cyber attacks expected to hit energy sector
Energy executives anticipate life, property, and environment-compromising cyber attacks on the sector within the next two years.
Story image
Ransomware
APAC organisations fail to disclose ransomware breaches
85% of organisations in APAC were breached by ransomware at least once in the past five years, but only 28% publicly disclosed the incident.
Story image
Microsoft
Elevation of Privilege the top 2021 Microsoft vulnerability
BeyondTrust has released its 2022 Microsoft Vulnerabilities Report, finding that Elevation of Privilege is the top vulnerability category for the second consecutive year.
Story image
Amazon Web Services / AWS
RedShield leverages AWS to scale cybersecurity services
"Working with AWS gives RedShield the ability to mitigate significant application layer DDoS attacks, helping leaders adopt best practices and security architectures."
Darktrace
Threat actors are exploiting weaknesses in interconnected IT/OT ecosystems. Darktrace illuminates your entire business and takes targeted action to stop emerging attacks.
Link image
Story image
Data Protection
Information management capabilities to meet privacy requirements
Organisations with customers or operations across more than one country face a spate of new and proposed privacy and data protection laws.
Story image
Cybersecurity
Cybersecurity prompts upgrade for 1.3 billion electricity meters
ABI Research finds Advanced Metering Infrastructure (AMI) and cybersecurity concerns are prompting the upgrade of 1.3 billion electricity meters by 2027.
Story image
Cybercrime
The ups and downs and runarounds of catching cybercriminals in NZ
We're becoming more and more aware of cybercrimes but how many criminals actually get caught? The New Zealand police explain why the answer is complicated.
Story image
Identity and Access Management
The post-pandemic workforce requires secure IAM capabilities
HID Global discusses what identity and access management means for organisations in today's convoluted digital world.
Story image
Microsoft
Global cybersecurity insurance market worth $11.5b this year
Future Market Insights finds the cybersecurity insurance market is expected to reach USD$11.5 billion in 2022, growing to $61.2 billion in 10 years.
Story image
Ransomware
Alarming surge in Conti Ransomware Group activity - report
A new report has identified a 7.6 per cent increase in the number of vulnerabilities tied to ransomware in Q1 2022.
Story image
Artificial Intelligence
Gartner reveals top three tech trends for banks this year
Gartner says generative artificial intelligence, autonomic systems and privacy-enhancing computation are gaining traction in banking and investment services.
Story image
Ransomware
Employees on the frontline of cyber defense - report
In the first quarter of 2022, employees found themselves more than ever at the frontline of cyber defense, according to a new report from Kroll. 
Story image
Ransomware
APAC ranks third-highest region targeted by ransomware
Asia Pacific has ranked the third-highest region globally to be targeted by ransomware, according to cybersecurity firm Group-IB.
Story image
Remote Working
Successful digital transformation in the hybrid work era is about embracing shifting goalposts
As organisations embraced remote working, many discovered they lacked the infrastructure needed to support history’s first global load test of remote work capabilities.
Story image
Kubernetes
Sysdig unveils new Kubernetes troubleshooting and cloud innovations
Sysdig has introduced two new innovations that look to help bolster cloud services and simplify Kubernetes troubleshooting.
Story image
Surveillance
i-PRO releases smallest AI-based surveillance camera on the market
The new i-PRO mini network camera is now available, with a pocket-sized form factor and full AI analytics functionality.
Story image
Check Point
Check Point and CCTV expert join forces to boost protection
The partnership will involve Check Point Quantum IoT Protect Nano Agent being embedded in Provision-ISR’s CCTV cameras for on-device runtime protection.
Story image
BYOD / Bring Your Own Device
How zero trust can lead the battle against ransomware
SecOps teams champion a zero trust strategy to support the fight against the escalating risk of cybercrime and help monitor threat actors across a network.
Story image
Malware
'Alarming' rise in ransomware threats - Verizon report
As criminals look to leverage increasingly sophisticated forms of malware, it is ransomware that continues to prove particularly successful.
Story image
Cybersecurity
What every CISO must answer to enable a best-in-class security operations program
It has been widely reported recently that South Australian government employees have been the victims of a cyberattack.
Story image
Customer experience
Gartner recognises Okta for abilities in Access Management
Okta has announced it has been recognised as a Customers' Choice for the fourth time in a row in the Gartner Peer Insights "Voice of the Customer" report.