IT Brief Australia logo
Technology news for Australia'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
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
Customer experience
The importance of service level management to customer experience
Staffing shortages have impacted site reliability engineers in particular since they are under extreme pressure to ensure that digital assets perform at optimum levels 24/7.
Story image
DevOps
Deloitte expands cloud observability practice with Dynatrace
Deloitte is expanding its cloud observability practice, including DevOps principles, AI/ML, cloud complexity management and software engineering.
Story image
Contact Centre
Leveraging technology in contact centres to reduce attrition rates
Many organisations worldwide have accelerated DX to better respond to changing market drivers and business environments after the disruption of the pandemic.
Story image
Informatica
Informatica, Oracle enter strategic global cloud partnership
Oracle named Informatica as a preferred partner for enterprise cloud data integration and data governance for data warehouse and lakehouse solutions on OCI. 
Story image
Sustainability
SoftIron named global leader for efficient DC infrastructure solutions
SoftIron has been named a global leader for supplying energy-efficient data infrastructure solutions for core-to-edge data centers after an assessment by Earth Capital Ltd.
Story image
Digital wallets
Australians lead the way in digital payment use - report
Australian consumers are at the forefront of mobile wallet use and adoption of digital banking tools, abandoning cash and physical payment experiences.
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
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
DaaS
NetApp launches Spot PC, a new Desktop-as-a-Service solution
This is a new managed cloud DaaS solution with security, automation, observability and optimisation capabilities, designed for the needs of today.
Story image
APAC
Top data and tech challenges for APAC banks - report
InterSystems’ new report finds that 87% of A/NZ banks experience frustrations and concerns in using their data to drive decision-making.
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
Rackspace
Skills shortages hold orgs back from capitalising on cloud 2.0
Organisations are becoming more comfortable with sophisticated 'cloud 2.0' technologies, even as they confront difficulties in hiring and retaining IT talent.
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
MEC
MEC spending for private cellular networks to reach $5.8b
A new ABI Research report finds the revenue for Multi Access Edge Compute (MEC) deployments for private cellular networks will reach USD$5.8 billion by 2030.
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
GapMaps
GapMaps Live to improve brand decisions on physical locations
GapMaps has released its latest service GapMaps Live, giving more insights and features to help brands make better decisions about physical locations.
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
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
Multi Cloud
Red Hat updates dev tools, empowers use of hybrid and multicloud
Red Hat has unveiled updates across its portfolio of developer tools, designed to help organisations build and deliver applications faster.
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
NVIDIA
NVIDIA announces a spate of new innovations at Computex 2022
NVIDIA has announced its latest innovations in data center, robotics, content creation, and gaming in a virtual keynote address on the opening day of Computex 2022 in Taipei.
Story image
Microsoft
Microsoft previews Power Platform website design offering
Microsoft has announced the preview of Power Pages, the fifth product in its Power Platform family, designed for low-code makers and professional developers.
Story image
Digital Signage
MAXHUB's Digital Signage range to bolster boardroom productivity
The new MAXHUB Digital Signage technology is purpose-built to make every kind of team meeting more effective.
Story image
Infosys
Consumer relationships with digital services continues to change
Two years of pandemic-induced reliance on technology for work has altered our relationship with digital apps and services, new research has found.
Story image
Symbio
Symbio consolidates TNZI business to support APAC expansion
Symbio has recently announced the consolidation of its international business (TNZI) under the Symbio brand to support its Asia Pacific expansion strategy.
Story image
Cybersecurity
4/10 Australian SMEs fallen victim to cyber-attacks since pandemic
Almost four out of teb SMEs in Australia have fallen victim to cyber-attacks since the pandemic began, according to a new study.
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
Microsoft, Cloudian partnership offers data center flexibility
Cloudian’s HyperStore object storage platform is now integrated and validated to work with Microsoft SQ Server 2022, offering more flexible and scalable data centers.
Story image
Red Sift
Entrust expands strategic partnership with Red Sift
Entrust has expanded its strategic partnership with Red Sift to make it easier for businesses to adopt Brand Indicators for Message Identification (BIMI) standards for email identification and security.
Story image
VPN
The most common online scams in Australia
No one is safe from online scammers, and many of these scammers have capitalised on the pandemic, using this confusing time to attack more people than ever.
Story image
SaaS
MedCart achieves close to AUD$10 million in sales with help from Marketplacer tech
Australian health and medical start-up MedCart has achieved annual sales of close to AUD$10 million in less than 12 months, utilising Marketplacer marketplace technology to help achieve successful results.
Exabeam
Find out how a behavioural analytics-driven approach can transform security operations with the new Exabeam commissioned Forrester study.
Link image
Story image
Sustainability
Aligned Data Centers increases sustainability-linked loan
Aligned Data Centers has increased its sustainability-linked loan from $375 million to $1.75 billion to speed up the next phase of its strategic growth.
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
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
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
Digital Transformation
Harnessing digital innovations to maximise loyalty programmes and improve CX
When it comes to the retail sector, merchants have never had access to so many different client touchpoints and data to understand their customers better.
Story image
Digital Transformation
Digital transformation increasing business complexities
A new survey suggests businesses must re-examine their digital transformation approach to better help employees adapt to change.
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
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
Phishing
MailGuard warns of new scam targeting Telstra customers
Telstra customers in Australia are being warned of a new scam involving "Unsuccessful Payment" messages.
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
SpaceX
Australian space tech startup secures SpaceX support
Space Machines Company has secured the support of SpaceX as a launch partner in carrying SMC's Optimus Orbital Transfer Vehicle to space next year.