Why is Application Security Testing of Financial Services Apps Important?

why-is-application-security-testing-of-financial-services-apps-important

The banking industry has embraced digitization in a big way and has offered customers several touchpoints for interaction and conducting financial transactions. If the Automated Teller Machines (ATMs) began the digital transformation journey for banks and other financial institutions, other touchpoints slowly came into their own to make lives easy for the end-users. These could be the ubiquitous credit and debit cards, financial services applications, digital wallets, banking portals, payment gateways, and others. If earlier carrying out banking transactions meant queuing outside a bank’s premises and waiting for one’s turn to interact with the teller, cashier, accountant, or manager depending on one’s requirement, there is a stark difference today.

Now, one can simply pay for a product or service using the online banking facilities through smartphone-based financial services apps or digital wallets. Such online services have realized the true power of the internet. However, one aspect that has often bedevilled this experience for the end-users is security. Since online banking services can be availed through many touchpoints and device platforms, they are targeted by cybercriminals to siphon off money from unsuspecting users. In fact, security has become the principal requirement to conduct online transactions, thereby necessitating financial services testing.

Further, the adoption of a financial application by customers is underpinned on how much data privacy, user experience, trust, and security it offers. Statistically speaking, cybercrime is likely to cause a loss of 6 trillion USD annually by 2021 (Source: Cybersecurity Ventures). Since the financial sector is targeted by fraudsters in many ways such as bank account theft, personal data breaches, money laundering, and even terrorist financing, the critical role of application security testing becomes apparent.

In order to address issues like cybercrime, fraud, and money laundering, most banks have devised a unified operating model comprising people, processes, technology, and governance. Cybersecurity consists of many components, which require a specialist approach. Also, with mobile-based financial services applications turning out to be the new target or channel of exploitation by cybercriminals, they should be subjected to stringent mobile application security testing.

Financial applications face several threats in the form of identity theft, password hacking, and session hijacking. Besides, since financial applications comprise a number of features including core banking, personalized customer pages, dashboard views, password changing option, and others, they need:

      ·    Secure authentication and authorization

  • Security extensions
  • Role-based access
  • Data encryption
  • Transport level security
  • Robust permission models

Key security vulnerabilities for financial applications

The security challenges any application security testing exercise faces are:

Multiple platforms: Since the financial applications are accessed through various device platforms having different hardware configurations, network settings, browsers, or operating systems and their versions, setting up an application security testing methodology can be a tough ask.

System migration: There has been a spike in the number of new technologies and frameworks in the market. This puts pressure on the financial app makers to optimize their apps for the new technologies or migrate to the new technology regime. Such a system migration can expose the sensitive data linked to such apps to be manipulated or exploited by cybercriminals.

Testers’ lack of knowledge in finance: Financial services apps need to comply with key financial rules, which need domain knowledge to comprehend. In most cases, testers conducting financial application testing do not have a financial background. This shortcoming can pose a challenge for QA testers to fully understand the logic behind the algorithms. As a result, the financial services app may not bake in the relevant financial rules or logic in its algorithm.

Faster time to market: Rising competition in the financial domain often forces banks or financial service providers to attract new customers with mobile-based apps. This haste can mean testers cutting down on the time for testing including the most important security testing. Result, a half baked app not fully compliant with security and regulatory requirements leaving glaring vulnerabilities to be exploited by cybercriminals.

Complexity: Any financial services app incorporates aspects of business and personal finance such as financial transactions and management, budgeting, accounts management, financial data management, and financial assets management. Further, the app may offer a multi-tier functionality to support large scale integration with third-party apps and several concurrent user sessions. The complex workflows may typically involve batch and real-time processing of transactions. Testing such a complex software for security can be both difficult and time-consuming, which the stakeholders may not always understand and are likely to skip.

What can happen if application security testing is not done?

Financial services applications are being increasingly used by people to conduct personal and business transactions. Since the transactions invariably involve money, the applications should be subjected to stringent software application security testing. However, what are the consequences if it is not done?

Failing to comply with regulatory compliance: The threat of cybercrime has made governments and agencies to frame stringent regulatory policies. Any financial services application needs to comply with such standards, namely, PCI DSS, ISO27001, SOX, GDPR, and others. In the absence of any such compliance, the institution running the app may face censure, penalties, or downright closure by the relevant authorities.

Increased vulnerabilities: Customers are increasingly adopting online transactions instead of making cash payments by using a host of device platforms – smartphones, tablets, desktops, and IoT devices. The absence of web application security testing can render the various APIs supporting the application vulnerable to various threat vectors.

Lack of stability with payment integrations: The entire e-commerce domain sits on the successful functioning of the payment gateways, which are further integrated with financial services applications. If these payment integrations are not tested for security, especially through identity verification and authorization, use of OTPs, prevention of multiple logins, and data encryption, among others, cybercriminals can swoop into the apps and swindle the bank accounts of customers and e-commerce enterprises.

New technologies: Banks are increasingly relying on voice recognition apps and chatbots to offer a seamless customer experience. Also, they are incorporating new technologies such as AI, ML, Big Data Analytics, and Blockchain, among others to derive better insights from transactions and deliver enhanced CX. If such technologies are not subjected to security testing, any resident glitch in them can derail the objective of using them in the first place.

Losing customer trust: Lack of security testing of financial services apps can leave vulnerabilities and bugs to go undetected, which can be exploited by cybercriminals to steal money from the bank accounts of users. This can result in customers losing trust in the app and the bank or financial institution administering the app. 

Conclusion

Financial services apps have become commonplace to be used by users to do a multitude of financial transactions. These include paying utility bills, booking tickets for airlines, railways, and movies, buying groceries and other merchandise from e-commerce stores, conducting banking transactions, and many others. The very nature of these transactions make such apps the prime target of cybercriminals. As a result, stringent application security testing should be mandatorily integrated in the value chain of developing such apps.

Resource 

James Daniel is a software Tech enthusiastic & works at Cigniti Technologies. I'm having a great understanding of today's software application testing quality that yields strong results and always happy to create valuable content & share thoughts. 

 

Article Source: devdojo.com

 

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