IT Brief New Zealand logo
Technology news for New Zealand's largest enterprises
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
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
Women in Technology
Huawei webinar emphasises the importance of women in tech
Industry findings by Coursera discussed as part of a webinar jointly organised by Huawei and Reuters Events found 6% more women enrolled in tech courses this year than in 2021.
Story image
CrescoData
SPS network now available to CrescoData eCommerce customers
CrescoData, a Pitney Bowes Company and PaaS business in the commerce space, says its customers can now connect to the SPS Commerce Retail Network.
Story image
Digital Marketing
Similarweb acquires SEO and rank tracking company Rank Ranger
Digital intelligence company Similarweb, which specialises in analysing web traffic, has acquired Rank Ranger, a market leader in SEO and rank tracking.
Story image
Artificial Intelligence
How to ensure ethical deployment of AI implementations
The increase in automation and machine technology such as AI and machine learning has unlocked a whole new level of scale and service to organisations. 
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
Artificial Intelligence
SAS announces new products amid cloud portfolio success
Analytics and AI company SAS is deepening its broad industry portfolio with offerings that support life sciences, energy, and martech.
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.
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
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
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
New vulnerabilities found in Nuspire’s Q1 2022 Threat Report
“Threat actors are quickly adjusting their tactics and these exploits tend to get industry attention, but the threat posed by older and attacks still persists."
Story image
Sisense
Data and analytics could be key to higher selling prices in APAC
Sisense's latest report has found that almost half of data professionals in APAC think customised data and analytics can create better selling prices for their products.
Story image
Qualys
Qualys updates Cloud Platform solution with rapid remediation
The new update is designed to enable organisations to fix asset misconfigurations, patch OS and third-party applications, and deploy custom software.
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
Attain
Revenue operations is taking centre stage
As the business world continues to evolve, new demands need to be met to keep up with the ever-changing landscape. 
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
Apricorn
Data backup plans inadequate, data still at risk - study
The Apricorn 2022 Global IT Security Survey revealed that while the majority organisations have data backup plans in place, data for many are at risk.
Story image
Innovation
Fastly acquires Glitch, enables faster developer innovation
"This acquisition brings together two of the worlds best ecosystems for application development into a single, seamless developer experience."
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.
Booster
Booster Innovation Fund. A fund of Kiwi ingenuity – for Kiwi investors.
Link image
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
Excel
Could your Excel practices be harming your business?
While Excel has been the de-facto standard for budgeting, planning, and forecasting, is it alone, enough to support organisations in the global marketplace that’s facing rapid changes due to digital transformation?
Story image
Customer experience
Research unveils precarious customer loyalty for retailers
New research has found customers are reassessing established brand loyalties as their priorities and behaviours shift.
Story image
Vodafone
Vodafone NZ buys remaining stake in retail joint venture
Vodafone New Zealand has purchased the remaining 50% stake in the specialist joint venture (JV) with private equity company Millennium Corp.
Story image
Cloud Security
Aqua Security createa unified scanner for cloud native security
“By integrating more cloud native scanning targets into Trivy, such as Kubernetes, we are simplifying cloud native security."
Story image
Application Security
What are the DDoS attack trend predictions for 2022?
Mitigation and recovery are vital to ensuring brand reputation remains solid in the face of a Distributed Denial of Service (DDoS) attack and that business growth and innovation can continue.
Story image
Digital Transformation
Pluralsight and Ingram Micro Cloud team up on cloud initiative
Pluralsight has teamed with Ingram Micro Cloud to build upon cloud competence and maturity internally, and externally support partners’ capabilities.
Story image
Cybersecurity
A10 Networks finds over 15 million DDoS weapons in 2021
A10 Networks notes that in the 2H 2021 reporting period, its security research team tracked more than 15.4 million Distributed Denial-of-Service (DDoS) weapons.
Story image
Digital Transformation
The impact of COVID-19 on healthcare environments and care delivery
The COVID-19 pandemic has revolutionised the healthcare industry while overcoming staff shortages, social distancing requirements, and lockdowns.
Story image
SaaS
Rubrik Security Cloud marks 'next frontier' in cybersecurity
"The next frontier in cybersecurity pairs the investments in infrastructure security with data security giving companies security from the point of data."
Story image
Infrastructure
Nutanix study reveals financial services sector lagging with multicloud adoption
Nutanix has released new research that reveals the financial services sector is lagging behind when it comes to multicloud adoption.
Softiron
For every 10PB of storage run on HyperDrive vs. comparable alternatives, an estimated 6,656 tonnes of CO₂ are saved by reduced energy consumption alone over its lifespan. That’s the equivalent of taking nearly 1,500 cars off the road for a year.
Link image
Story image
Data Center
Preventing downtime costs and damage with Distributed Infrastructure Management
Distributed Infrastructure Management (DIM) can often be a lifeline for many enterprises that work with highly critical ICT infrastructure and power sources.
Story image
Ransomware
Cybersecurity starts with education
In 2021, 80% of Australian organisations responding to the Sophos State of Ransomware study reported being hit by ransomware. 
Story image
Digital Transformation
The Huawei APAC conference kicks off with digital transformation
More than 1500 people from across APAC have gathered for the Huawei APAC Digital Innovation Congress to explore the future of digital innovation.
Story image
Sift
Sift shares crucial advice for preventing serious ATO breaches
Are you or your business struggling with Account Takeover Fraud (ATO)? One of the latest ebooks from Sift can provide readers with the tools and expertise to help launch them into the new era of account security.
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
Supply chain
Jetstack promotes better security with supply chain toolkit
The web-based resource is designed to help organisations evaluate and plan the crucial steps they need to establish effective software supply chain security.
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
Lightspeed
Lightspeed launches all-in-one marketing platform in A/NZ
ECommerce provider, Lightspeed has launched a new all-in-one marketing solution, Lightspeed Marketing & Loyalty in Australia and New Zealand.
Story image
Wireless
Cradlepoint expands its Cellular Intelligence capabilities
Cradlepoint has announced additional Cellular Intelligence capabilities with its NetCloud service.
Exabeam
Find out how a behavioural analytics-driven approach can transform security operations with the new Exabeam commissioned Forrester study.
Link image
Story image
Digital Transformation
Trading up: It's time to swap core systems for flexible digital applications
This year will see more oranisations planning and commencing high tech renovations that will shake up the way they operate.