R. Kinney Williams & Associates
R. Kinney Williams
& Associates

Internet Banking News

June 4, 2006

CONTENT Internet Compliance Information Systems Security
IT Security Question
 
Internet Privacy
 
Website for Penetration Testing
 
Does Your Financial Institution need an affordable Internet security penetration-vulnerability test?  Our clients in 41 states rely on VISTA to ensure their IT security settings, as well as meeting the independent diagnostic test requirements of FDIC, OCC, OTS, FRB, and NCUA, which provides compliance with Gramm-Leach Bliley Act 501(b) The VISTA penetration study and Internet security test is an affordable-sophisticated process than goes far beyond the simple scanning of ports and focuses on a hacker's perspective, which will help you identify real-world weaknesses.  For more information, give Kinney Williams a call today at 806-798-7119 or visit http://www.internetbankingaudits.com/.

FYI
- U.S. pulls Lenovo PCs from State Department - May 19, 2006 - The State Department has backed down on a decision to install computers made by Chinese company Lenovo on its classified networks. http://www.washingtontimes.com/world/20060518-104316-9737r.htm

FYI - Credit card security rules to get update - Proposed new security rules for credit card-accepting businesses will put more scrutiny on software, but let them off the hook on encryption. The update to the Payment Card Industry (PCI) Data Security Standard, due this summer, responds to evolving attacks as well as to challenges some businesses have with the encryption of consumer data, Tom Maxwell, director of e-Business and Emerging Technologies at MasterCard International. http://news.com.com/2102-1029_3-6072594.html?tag=st.util.print

FYI - DoD Offers Free Anti-Spyware for Personal Use - The Defense Information Systems Agency (DISA) has licensed free anti-spyware software for all government employees and armed forces personnel for use on personal computer systems. http://www.news.navy.mil/search/display.asp?story_id=23639

FYI - Japanese power plant secrets leaked by virus - Sensitive information about Japanese power plants has leaked online from a virus-infected computer for the second time in less than four months. Data regarding security arrangements at a thermoelectric power plant run by the Chubu Electric Power in Owase, Mie Prefecture in central Japan spilled online this week as a result of an unnamed virus infection. http://www.theregister.co.uk/2006/05/17/japan_power_plant_virus_leak/print.html

FYI - Cyber crooks dip into Frost accounts - Hackers dipped into the accounts of about 100 Frost Bank customers after they took Visa debit card information from the database of an unnamed national retailer and went on a spending spree, Frost officials said.  http://www.mysanantonio.com/business/stories/MYSA051906.01E.frosttheft.216bbd06.html

FYI - University server in hackers' hands for a year - An unprecedented string of electronic intrusions has prompted Ohio University to place at least one technician on paid administrative leave and begin a sweeping reorganization of the university's computer services department. http://news.com.com/2102-7349_3-6074739.html?tag=st.util.print

FYI - Symantec Plugs Anti-virus Worm Hole in Record Time - Working feverishly through the holiday weekend, Symantec's security response team has completed patches for a "high-risk" worm hole in two enterprise-facing product lines.
http://www.eweek.com/article2/0%2C1895%2C1968603%2C00.asp
http://isc.sans.org/diary.php?storyid=1368


Return to the top of the newsletter

WEB SITE COMPLIANCE - Since financial Institutions will be expected to achieve compliance with the guidance no later than year-end 2006, we continue our series on the FFIEC Authentication in an Internet Banking Environment.  (Part 2 of 13)

Background

Financial institutions engaging in any form of Internet banking should have effective and reliable methods to authenticate customers. An effective authentication system is necessary for compliance with requirements to safeguard customer information, to prevent money laundering and terrorist financing, to reduce fraud, to inhibit identity theft, and to promote the legal enforceability of their electronic agreements and transactions. The risks of doing business with unauthorized or incorrectly identified persons in an Internet banking environment can result in financial loss and reputation damage through fraud, disclosure of customer information, corruption of data, or unenforceable agreements.

There are a variety of technologies and methodologies financial institutions can use to authenticate customers. These methods include the use of customer passwords, personal identification numbers (PINs), digital certificates using a public key infrastructure (PKI), physical devices such as smart cards, one-time passwords (OTPs), USB plug-ins or other types of "tokens", transaction profile scripts, biometric identification, and others. (The appendix to this guidance contains a more detailed discussion of authentication techniques.) The level of risk protection afforded by each of these techniques varies. The selection and use of authentication technologies and methods should depend upon the results of the financial institution's risk assessment process.

Existing authentication methodologies involve three basic "factors":

Something the user knows (e.g., password, PIN);

Something the user has (e.g., ATM card, smart card); and

Something the user is (e.g., biometric characteristic, such as a fingerprint).

Authentication methods that depend on more than one factor are more difficult to compromise than single-factor methods. Accordingly, properly designed and implemented multifactor authentication methods are more reliable and stronger fraud deterrents. For example, the use of a logon ID/password is single-factor authentication (i.e., something the user knows); whereas, an ATM transaction requires multifactor authentication: something the user possesses (i.e., the card) combined with something the user knows (i.e., PIN). A multifactor authentication methodology may also include "out-of-band" controls for risk mitigation.

The success of a particular authentication method depends on more than the technology. It also depends on appropriate policies, procedures, and controls. An effective authentication method should have customer acceptance, reliable performance, scalability to accommodate growth, and interoperability with existing systems and future plans.

Return to the top of the newsletter

INFORMATION TECHNOLOGY SECURITY
We continue our series on the FFIEC interagency Information Security Booklet.  

SECURITY CONTROLS - IMPLEMENTATION - NETWORK ACCESS


Stateful Inspection Firewalls

Stateful inspection firewalls are packet filters that monitor the state of the TCP connection.  Each TCP session starts with an initial handshake communicated through TCP flags in the header information. When a connection is established the firewall adds the connection information to a table. The firewall can then compare future packets to the connection or state table. This essentially verifies that inbound traffic is in response to requests initiated from inside the firewall.

Proxy Server Firewalls

Proxy servers act as an intermediary between internal and external IP addresses and block direct access to the internal network. Essentially, they rewrite packet headers to substitute the IP of the proxy server for the IP of the internal machine and forward packets to and from the internal and external machines. Due to that limited capability, proxy servers are commonly employed behind other firewall devices. The primary firewall receives all traffic, determines which application is being targeted, and hands off the traffic to the appropriate proxy server. Common proxy servers are the domain name server (DNS), Web server (HTTP), and mail (SMTP) server. Proxy servers frequently cache requests and responses, providing potential performance benefits. Additionally, proxy servers provide another layer of access control by segregating the flow of Internet traffic to support additional authentication and logging capability, as well as content filtering. Web and e-mail proxy servers, for example, are capable of filtering for potential malicious code and application-specific commands.


Return to the top of the newsletter

IT SECURITY QUESTION:

C. HOST SECURITY

8. Determine whether the host-based IDSs identified as necessary in the risk assessment are properly installed and configured, that alerts go to appropriate individuals using an out-of-band communications mechanism, and that alerts are followed up.

Return to the top of the newsletter

INTERNET PRIVACY
- We continue our series listing the regulatory-privacy examination questions.  When you answer the question each week, you will help ensure compliance with the privacy regulations.


Initial Privacy Notice

1)  Does the institution provide a clear and conspicuous notice that accurately reflects its privacy policies and practices to all customers not later than when the customer relationship is established, other than as allowed in paragraph (e) of section four (4) of the regulation? [4(a)(1))]?

(Note: no notice is required if nonpublic personal information is disclosed to nonaffiliated third parties only under an exception in Sections 14 and 15, and there is no customer relationship. [4(b)] With respect to credit relationships, an institution establishes a customer relationship when it originates a consumer loan. If the institution subsequently sells the servicing rights to the loan to another financial institution, the customer relationship transfers with the servicing rights. [4(c)])

NETWORK SECURITY TESTING - IT examination guidelines require financial institutions to annually conduct an independent internal-network penetration test.  With the Gramm-Leach-Bliley and the regulator's IT security concerns, it is imperative to take a professional auditor's approach to annually testing your internal connections to your network.  For more information about our independent-internal testing, please visit http://www.internetbankingaudits.com/internal_testing.htm.

 

PLEASE NOTE:  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.  

Back Button

Company Information
Yennik, Inc.

4409 101st Street
Lubbock, Texas 79424
Office 806-798-7119
Examiner@yennik.com

 

Please visit our other web sites:
VISTA penetration-vulnerability testing
The Community Banker - Bank FFIEC & ADA Web Site Audits
Credit Union FFIEC & ADA Web Site Audits - Bank Auditing Services
US Banks on the Internet  
US Credit Unions on the Internet

All rights reserved; Our logo is registered with the United States Patent and Trademark Office.
Terms and Conditions, Privacy Statement, Copyright Yennik, Incorporated