R. Kinney Williams - Yennik, Inc.
R. Kinney Williams
Yennik, Inc.

Internet Banking News
Brought to you by Yennik, Inc. the acknowledged leader in Internet auditing for financial institutions.

February 24, 2019

wsletter Content FFIEC IT Security FFIEC & ADA Web Site Audits
Web Site Compliance NIST Handbook Penetration Testing
Does Your Financial Institution need an affordable cybersecurity Internet security audit?  Yennik, Inc. has clients in 42 states that rely on our cybersecurity audits to ensure proper Internet security settings and to meet the independent diagnostic test requirements of FDIC, OCC, FRB, and NCUA, which provides compliance with Gramm-Leach Bliley Act 501(b) as well as the penetration test complies with the FFIEC Cybersecurity Assessment Tool regarding resilience testing The cybersecurity penetration audit and Internet security testing is an affordable-sophisticated process than goes far beyond the simple scanning of ports.  The audit focuses on a hacker's perspective, which will help you identify real-world cybersecurity weaknesses.  For more information, give R. Kinney Williams a call today at 806-798-7119 or visit http://www.internetbankingaudits.com/.

FFIEC information technology audits - As a former bank examiner with over 40 years IT audit experience, I will bring an examiner's perspective to the FFIEC information technology audit for bankers in Texas, New Mexico, Colorado, and Oklahoma.  For more information go to On-site FFIEC IT Audits.

- Company sues worker who fell for email scam - An office worker who transferred her employer's cash to an online fraudster allegedly ignored a warning telling her she was falling victim to a scam. https://www.bbc.com/news/uk-scotland-glasgow-west-47135686

Gov. Newsom proposes ‘data dividend’ for Calif. consumers - California May have some of the strictest data privacy and security laws on the books, but Gov. Gavin Newsom has floated a “new data dividend” that would compel Google, Facebook and the like to pay consumers in the state who choose to share their data. https://www.scmagazine.com/home/security-news/gov-newsom-proposes-data-dividend-for-calif-consumers/

How to build privacy for security and achieve sustained compliance - Global and domestic privacy regulations like GDPR and the California Consumer Privacy Act (CCPA) are forcing businesses to develop and implement comprehensive data management processes to comply with new privacy requirements. https://www.scmagazine.com/home/opinion/how-to-build-privacy-for-security-and-achieve-sustained-compliance/

Israeli cyber-hotline offers help for the hacked - Israel has launched a cyber hotline, staffed mostly by veterans of military computing units, to enable businesses and private individuals to report suspected hacking and receive real-time solutions. https://www.reuters.com/article/us-cyber-israel-hotline/israeli-cyber-hotline-offers-help-for-the-hacked-idUSKCN1Q70K1

US needs an internet data privacy law, GAO tells Congress - Chief auditor cites Facebook's Cambridge Analytica data scandal as an example of why a privacy law is necessary. https://www.cnet.com/news/us-needs-an-internet-data-privacy-law-gao-tells-congress/


FYI - Image-I-Nation supply chain breach exposes data of major credit agencies’ customers - Image-I-Nation Technologies, Inc., which provides hosting services and software to consumer reporting agencies like Equifax, Experian and TransUnion, experienced a supply chain breach that left users’ personal information exposed for as long as two weeks. https://www.scmagazine.com/home/security-news/image-i-nation-supply-chain-breach-exposes-data-of-major-credit-agencies-customers/

Hackers KO Malta's Bank of Valletta in attempt to nick €13m - Hapless bank goes into lockdown mode, vanishes from the internet - Malta's Bank of Valetta (BOV) has pulled the plug on its entire internet access, including shutting down cashpoints and branch offices, after detecting a "cyber intrusion" by crims that tried to steal nearly €13m. https://www.theregister.co.uk/2019/02/13/bank_of_valletta_13m_euro_hackers_shutdown/

Ever used VFEmail? No? Well, chances are you never will now: Hackers wipe servers, backups in 'catastrophic' attack - A hacker wiped every server and backup of VFEmail this week in a "catastrophic" attack, according to the webmail service. https://www.theregister.co.uk/2019/02/12/vfemail_hacked_wiped/

Dunn Brothers Coffee, Holiday Inn among those exposed by third-party payment card vendor breach - A company that handles payment operations for a large number of hotels and food establishments, including Holiday Inn, Dunn Brothers Coffee and Zipps Sports Grill, is informing its customers of a data breach that may have compromised consumer’s payment card information. https://www.scmagazine.com/home/security-news/data-breach/dunn-brothers-coffee-holiday-inn-among-those-exposed-by-third-party-payment-card-vendor-breach/

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We continue covering some of the issues discussed in the "Risk Management Principles for Electronic Banking" published by the Basel Committee on Bank Supervision.
  Banking organizations have been delivering electronic services to consumers and businesses remotely for years. Electronic funds transfer, including small payments and corporate cash management systems, as well as publicly accessible automated machines for currency withdrawal and retail account management, are global fixtures. However, the increased world-wide acceptance of the Internet as a delivery channel for banking products and services provides new business opportunities for banks as well as service benefits for their customers. 
  Continuing technological innovation and competition among existing banking organizations and new market entrants has allowed for a much wider array of electronic banking products and services for retail and wholesale banking customers. These include traditional activities such as accessing financial information, obtaining loans and opening deposit accounts, as well as relatively new products and services such as electronic bill payment services, personalized financial "portals," account aggregation and business-to-business market places and exchanges. 
  Notwithstanding the significant benefits of technological innovation, the rapid development of e-banking capabilities carries risks as well as benefits and it is important that these risks are recognized and managed by banking institutions in a prudent manner. These developments led the Basel Committee on Banking Supervision to conduct a preliminary study of the risk management implications of e-banking and e-money in 1998. This early study demonstrated a clear need for more work in the area of e-banking risk management and that mission was entrusted to a working group comprised of bank supervisors and central banks, the Electronic Banking Group (EBG), which was formed in November 1999.
  The Basel Committee released the EBG's Report on risk management and supervisory issues arising from e-banking developments in October 2000. This Report inventoried and assessed the major risks associated with e-banking, namely strategic risk, reputational risk, operational risk (including security and legal risks), and credit, market, and liquidity risks. The EBG concluded that e-banking activities did not raise risks that were not already identified by the previous work of the Basel Committee. However, it noted that e-banking increase and modifies some of these traditional risks, thereby influencing the overall risk profile of banking. In particular, strategic risk, operational risk, and reputational risk are certainly heightened by the rapid introduction and underlying technological complexity of e-banking activities.

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FFIEC IT SECURITY - We continue our series on the FFIEC interagency Information Security Booklet.  

  Network security requires effective implementation of several control mechanisms to adequately secure access to systems and data. Financial institutions must evaluate and appropriately implement those controls relative to the complexity of their network.  Many institutions have increasingly complex and dynamic networks stemming from the growth of distributed computing.
  Security personnel and network administrators have related but distinct responsibilities for ensuring secure network access across a diverse deployment of interconnecting network servers, file servers, routers, gateways, and local and remote client workstations.  Security personnel typically lead or assist in the development of policies, standards, and procedures, and monitor compliance. They also lead or assist in incident-response efforts.  Network administrators implement the policies, standards, and procedures in their day-to-day operational role.
  Internally, networks can host or provide centralized access to mission-critical applications and information, making secure access an organizational priority. Externally, networks integrate institution and third-party applications that grant customers and insiders access to their financial information and Web-based services. Financial institutions that fail to restrict access properly expose themselves to increased transaction, reputation, and compliance risk from threats including the theft of customer information, data alteration, system misuse, or denial-of-service attacks.

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NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY - We continue the series on the National Institute of Standards and Technology (NIST) Handbook.


19.2 Uses of Cryptography

Cryptography is used to protect data both inside and outside the boundaries of a computer system. Outside the computer system, cryptography is sometimes the only way to protect data. While in a computer system, data is normally protected with logical and physical access controls (perhaps supplemented by cryptography). However, when in transit across communications lines or resident on someone else's computer, data cannot be protected by the originator's logical or physical access controls. Cryptography provides a solution by protecting data even when the data is no longer in the control of the originator.

19.2.1 Data Encryption

One of the best ways to obtain cost-effective data confidentiality is through the use of encryption. Encryption transforms intelligible data, called plaintext, into an unintelligible form, called ciphertext. This process is reversed through the process of decryption. Once data is encrypted, the ciphertext does not have to be protected against disclosure. However, if ciphertext is modified, it will not decrypt correctly.

Both secret key and public key cryptography can be used for data encryption although not all public key algorithms provide for data encryption.

To use a secret key algorithm, data is encrypted using a key. The same key must be used to decrypt the data.

When public key cryptography is used for encryption, any party may use any other party's public key to encrypt a message; however, only the party with the corresponding private key can decrypt, and thus read, the message.

Since secret key encryption is typically much faster, it is normally used for encrypting larger amounts of data.

19.2.2 Integrity

In computer systems, it is not always possible for humans to scan information to determine if data has been erased, added, or modified. Even if scanning were possible, the individual may have no way of knowing what the correct data should be. For example, "do" may be changed to "do not," or $1,000 may be changed to $10,000. It is therefore desirable to have an automated means of detecting both intentional and unintentional modifications of data.

While error detecting codes have long been used in communications protocols (e.g., parity bits), these are more effective in detecting (and correcting) unintentional modifications. They can be defeated by adversaries. Cryptography can effectively detect both intentional and unintentional modification; however, cryptography does not protect files from being modified. Both secret key and public key cryptography can be used to ensure integrity. Although newer public key methods may offer more flexibility than the older secret key method, secret key integrity verification systems have been successfully integrated into many applications.

When secret key cryptography is used, a message authentication code (MAC) is calculated from and appended to the data. To verify that the data has not been modified at a later time, any party with access to the correct secret key can recalculate the MAC. The new MAC is compared with the original MAC, and if they are identical, the verifier has confidence that the data has not been modified by an unauthorized party. FIPS 113, Computer Data Authentication, specifies a standard technique for calculating a MAC for integrity verification.

Public key cryptography verifies integrity by using of public key signatures and secure hashes. A secure hash algorithm is used to create a message digest. The message digest, called a hash, is a short form of the message that changes if the message is modified. The hash is then signed with a private key. Anyone can recalculate the hash and use the corresponding public key to verify the integrity of the message.

Some of the above links may have expired, especially those from news organizations.  We may have a copy of the article, so please e-mail us at examiner@yennik.com if we can be of assistance.