Common Application Vulnerabilities We See in Fintech and How to Fix Them

What are Application Vulnerabilities

By application vulnerability, we mean design flaws in code or configuration that are susceptible to potential attacks, which can lead to sensitive data exposure. This typically results from mistakes at various stages of development, as well as insufficient security controls, allowing hackers to bypass authentication or inject malicious code.

Because unaddressed security risks can lead to breaches, application developers face significant financial losses and loss of trust. According to IBM, the global average cost of a data breach is $4.4 million. This means that robust application security posture management and a proactive approach to software security are critical for organizations. Threat modeling, application code reviews, secure frameworks, regular software updates, and a DevSecOps approach help identify gaps and significantly reduce risk.

By providing services to clients through an app or web application, organizations interact with and store sensitive data that is of interest to attackers. Even a single insecure component can become a gateway for exploitation, so the question of how to identify vulnerabilities effectively is paramount. Lack of reliable software security often leads to failure. Investing in application security reduces the risk of breaches, protects stored data, and ensures compliance with industry regulations. The good news is that common vulnerabilities can be fixed and prevented early on with the right development approach. Collaborating with a development firm is a way to implement strong application security strategies, thereby avoiding loss of money, time, and reputation for fintech companies.

5 Key Vulnerabilities in Fintech Apps

The OWASP Top Ten list is especially valuable when it comes to current and new vulnerabilities. Although it includes 10 issues, five vulnerabilities are the most common. Therefore, promptly addressing them allows you to avoid most software security mistakes.

Insecure APIs and Broken Authentication

Weak authentication mechanisms allow an attacker to bypass login systems and gain unauthorized access to steal credentials or escalate privileges. Hackers can do this through URL rewriting, misconfigured application timeouts, poor password hashing, or predictable login credentials. Key factors to consider include implementing appropriate identity and access controls and avoiding the use of plain passwords. 

Security can be achieved through implementing a range of fixes: 

• Token Hygiene. Set short TTL (Time To Live) values ​​for access and refresh tokens, as well as implement automatic token rotation.

• Authentication and Authorization. Implement a clear distinction between "authn" (user identity verification) and "authz" (access rights verification), ensure independent permission checks for each request, and adhere to the least privilege principle.

• Rate Limiting and Throttling. Limit the number and speed of requests. 

• Schema Validation. Use JSON Schema or OpenAPI Specification. Validate all incoming data against the schema and reject requests with unexpected fields or data types.

• Anomaly Detection. Implement alerts and monitoring for anomalous patterns (geography, time, number of requests) and track attempts to access non-existent endpoints.

• Multi-Factor Authentication. Use MFA for administrative accounts and critical operations.

Additionally, following a DevSecOps approach provides benefits by enabling the setup of configurations and access rules, monitoring logs, metrics, and alerts, and preparing incident response playbooks.

Injection Flaws

Common injection attacks include SQL injection and cross-site scripting (XSS). SQL injection occurs when a hacker inserts malicious SQL statements into a query, allowing them to execute commands the application shouldn't perform. This type of injection leads to system compromise, unauthorized access to critical data, and database manipulation.

Cross-site scripting occurs when an attacker injects malicious scripts to gain access to sensitive user data and credentials, as well as hijack user sessions, deface websites, and redirect users to scam sites under the attacker's control.

The checklist of measures to protect against injection attacks includes:

• Parameterized Queries. Use prepared statements instead of string concatenation in SQL, and leverage Object-Relational Mapping (ORM) frameworks that automatically parameterize queries.

• Output Encoding. Escape data before outputting to HTML and use context-sensitive encoding.

• Content Security Policy (CSP). Configure CSP HTTP headers to control content sources.

• Input Validation. Follow a whitelist approach, allowing only known, safe formats, and validate data server-side.

• Secrets Management. Avoid storing credentials in code or Git configuration files; implement secret rotation and restrict access for each service.

Release Secure Software And Avoid Costly Fixes. Discover the DevSecOps Approach with Jappware

Insecure Deserialization

Insecure deserialization opens the door for attackers to execute malicious code, perform injection attacks, manipulate objects, and exploit privilege escalation. This vulnerability typically occurs when untrusted data is used to abuse the deserialization process logic. While serialization converts an object into a format that can be transmitted, stored, and reconstructed, deserialization is the reverse process, which can recreate the original object.

The vulnerability can result in an application loading data without validating it, enabling hackers to perform remote code execution (RCE), denial of service (DoS), and authentication bypass.

A modern approach to protecting against insecure deserialization includes:

• JSON + Schema Validation. Use JSON instead of native serialization formats and enforce a strict validation scheme (JSON Schema) to verify the data structure. Reject data that does not conform to the schema.

• Allow-List Types. Whitelist permitted types for deserialization and only allow deserialization into specified, safe classes.

• Disable Polymorphic Binding. Prevent clients from specifying the object type and disable type hint processing in JSON.

• Isolation. Deserialization should be performed in an isolated environment with minimal privileges. Sandboxes or containers can be used to process untrusted data.

• Signed Payloads. Use a cryptographic signature to guarantee data integrity and reject data with an invalid or missing signature.

Third-Party and Supply-Chain Vulnerabilities

Common issues in web application security include the use of external components and solutions without proper testing. Third-party and supply-chain vulnerabilities can arise when organizations integrate APIs, frameworks, libraries, or components with known vulnerabilities into their applications. The core problem is that with this approach, developers rely on external code, meaning they lack full control over it, creating security gaps. The use of outdated components or vulnerable elements, an attack on software vendors, or ignoring third-party module validation can lead to a situation where companies risk leaks, fines, and process downtime, while the vulnerability itself is beyond their direct control.

Effective vulnerability protection practices include:

• Integrate Software Composition Analysis (SCA) into CI/CD. This automates dependency scanning in the CI/CD pipeline and alerts the team when new vulnerabilities are discovered.

• Software Bill of Materials (SBOM). Generate an SBOM for each release to have a complete list of all components and dependencies, and quickly identify affected systems when a vulnerability is detected.

• Version Pinning. Avoid floating versions; instead, pin precise versions of all dependencies.

• Allow-List Dependencies. Maintain an inventory of approved libraries and components and block installation of unapproved packages using policy-as-code.

• Rapid Patching. Strengthen the emergency update process for critical vulnerabilities and automate patching for non-critical updates.

• Advisory Monitoring. Subscribe to security alerts such as GitHub Security, the National Vulnerability Database (NVD) Advisories, Snyk vulnerability monitoring, and conduct regular vulnerability reviews.

• SLSA/Provenance. Use the Supply-chain Levels for Software Artifacts (SLSA) framework to protect your supply chain; verify the provenance of artifacts before using them.

Data Storage and Transmission Weaknesses

Storage, transmission, and any interaction with data are critical aspects of fintech software applications. Interception and access of data (such as passwords, payment information, and sensitive user data) by hackers guarantees lawsuits, loss of customer trust, and fines for regulatory violations. The most common problems in data storage and transmission are often the result of a range of developer mistakes. These include storing passwords as plain text or with weak hashing, using outdated HTTP instead of HTTPS, integrating insecure APIs without authentication, applying weak encryption algorithms (MD5, SHA1), or storing unencrypted data, as well as ignoring protection for backups and temporary files.

Strategies for Addressing and Preventing Application Vulnerabilities

Effective strategies and solutions that developers can follow to minimize risks and address vulnerabilities include:

• Bounty Programs. This is an excellent approach, allowing collaboration with ethical hackers and bug hunters. With applications tested by white hat hackers, organizations gain insight into vulnerabilities and weaknesses in their software that could be exploited by attackers.

• Roles & Authorizations. It's worth implementing the principle of least privilege to ensure users and applications have only the access required to perform actions. Role-based access control (RBAC) and permissions can help avoid problems with broken access control that allows access to unauthorized data or features.

• Secure Code. It's crucial to thoroughly scan and audit your code to find vulnerabilities. Application security tools and methods such as static analysis (Static Application Security Testing), dynamic analysis (Dynamic Application Security Testing), and SCA (Software Composition Analysis) help identify vulnerabilities, security misconfigurations, flaws in logic and structure, gaps in open-source components, and other security risks.

• Penetration Testing. Pentesting simulates a real-world attack to identify vulnerabilities and assess the resilience of an application, providing insight into security gaps, database weaknesses, authentication system errors, identification failures, and more.

• Logging and Monitoring. Insufficient logging and monitoring lead to the system failing to record and monitor security-relevant events, allowing attackers to operate undetected. Organizations must implement continuous monitoring and detailed logging to detect and respond to suspicious activity (failed login attempts, unauthorized data access, etc.) in real time.

• Patch Management. Automated patching and updates should be included in your application vulnerability management. This allows you to promptly install the latest security fixes for your applications, libraries, and frameworks, avoiding situations where outdated software will be used as entry points for attackers.

• Failed Login Attempts Limit. Implement account lockouts after a set number of failed attempts to prevent unauthorized account access. It also makes sense to add CAPTCHA to differentiate between bots and users, and implement multi-factor authentication (MFA) for additional security.

Summary

Application vulnerabilities are entry points for attackers. When it comes to financial products, security is a key priority, as any gaps in the application code and architecture can lead to data breaches and ruin even the most innovative products.

Following the OWASP TOP 10 recommendations, conducting regular testing & threat modeling, as well as applying a DevOps approach to development, enables vulnerabilities to be identified and fixed early, before a product is released. This helps avoid costly fixes, fines, and loss of customer trust.

Start your project with Jappware, gaining access to our expertise and security team to minimize the attack surface and ensure your application is secure.