Fintech Startups Get Sloppy With Application Security

British security firm Immuniweb has looked at CB Insights' report entitled "The Fintech 250: The Top Fintech Startups Of 2018" to identify 250 financial tech companies that are still in their early development stages. The report aimed to shed some light on the overall state of web and application security of the fintech companies and compare it with the results of traditional banks.

Immuniweb did similar research on banks which they reported out as "State of Application Security at S&P Global World's 100 Largest Banks," so they do have some experience in analyzing the financial sector.

This time, they come to some sweeping conclusions. For instance, they found 100% of the companies that they looked at have security, privacy and compliance issues related to abandoned or forgotten web applications, APIs and subdomains.

The severity of those issues may vary greatly, with few websites actually failing the tests. A fail would have meant "Exploitable and publicly known security vulnerabilities found."

As far as website security, two main startup websites had the highest "A+" grades both for (1) SSL encryption and (2) website security fully meeting applicable PCI DSS and GDRP compliance requirements. On other websites, Immmuniweb found 64 security issues related to outdated web software or its components. One website had as many as 17 outdated JS libraries and other external software components.

Subdomains were in worse shape for security. There were 2,474 outdated software components across the tested subdomains. The oldest vulnerable CMS is WordPress 4.7.1, with 26 publicly known security issues so far.

SSL/TLS was well implemented by the sites across the board. Only one main website scored with a "B" grade, while all others received "A" or even the highest possible "A+" grades.

But the situation with HTTPS encryption on the subdomains is "alarming," according to Immuniweb. As many as 93 subdomains had the failing "F" grade, and 537 had an untrusted or expired SSL certificate.

GDPR tests were abysmal. As the report says, "64 main websites failed the GDPR compliance test. After vulnerable web software, the second most frequent reason is a missing cookie disclaimer or unset security flags on cookies that transfer tracking, PII or otherwise sensitive information. The third top cause is missing or inaccessible privacy policy." Looks like a lot of work is needed there, and the subdomains as well.

The report looks at fintech's mobile applications too. They found 100% of the mobile applications contained at least one medium-risk security vulnerability, 97% of the mobile applications had two or more medium-risk vulnerabilities, and 3% of the mobile applications contained at least one high-risk security vulnerability. Yikes. While the report offers more detail, the theme stays the same. These startups have to concentrate on their business or they, in time, will lose their customers.

— Larry Loeb has written for many of the last century's major "dead tree" computer magazines, having been, among other things, a consulting editor for BYTE magazine and senior editor for the launch of WebWeek.