www.verimatrix.com Open in urlscan Pro
162.159.137.54  Public Scan

Submitted URL: https://c24p-04.na1.hubspotlinks.com/Ctc/ZN+113/c24p-04/VWszzN6hnnj1V73LC78ryvQpVfQRxk599P41MrH-SW5n4LbW7lCGcx6lZ3kSW7wl4p-4VLyYlN1D9...
Effective URL: https://www.verimatrix.com/cybersecurity/knowledge-base/how-verimatrix-helps-financial-institutions-meet-hefty-regulation-r...
Submission: On February 06 via api from ES — Scanned from ES

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FINTECH


HOW VERIMATRIX HELPS FINANCIAL INSTITUTIONS MEET HEFTY REGULATION REQUIREMENTS

December 26, 2023


TABLE OF CONTENTS



 1. General Data Protection Regulation (GDPR) – EU & some non-EU entities
 2. Data Protection Act of 2018 (DPA) – United Kingdom
 3. EU Cybersecurity Act – EU
 4. Gramm Leach Bliley Act – United States
 5. Network and Information Systems Directive 2 (NIS2) – EU
 6. Payment Services Directive 2 (PSD2) – EU
 7. Cyber Resilience Act (CRA) – EU
 8. U.S. state-level data privacy regulations
 9. Protection against man-in-the-middle (MITM) attacks

The massive digital transformation of the global financial system and customer
demands for ubiquitous transactions make financial institutions prime targets
for cyberattacks. The breadth of cyber risks and threats runs the gamut, but the
mobile banking applications and payments now pervasively used are a particularly
fast-growing target. The sensitive personal information transacted through
mobile devices greatly increases the risk of endpoint attacks. 

Thus, financial institutions now face a growing list of cybersecurity and data
privacy regulations designed to protect customers’ information and assets. For
instance, as of May 2022, the Federal Reserve System in the United States
requires that financial institutions disclose cyber incidents to regulators
within 36 hours of an incident if it could impact the U.S. banking system. The
New York State Department of Financial Services has published its NYDFS
Cybersecurity Regulation (23 NYCRR 500), requiring financial services
institutions, including agencies and branches of non-U.S. banks licensed in the
state of New York, to assess their cybersecurity risk profile. 

Verimatrix Extended Threat Defense (XTD), App Shield, Code Shield, and Key
Shield protection solutions help banking and financial services organizations
comply with the breadth of regulations, leveraging leading industry frameworks
and standards that guide best data protection practices. The following is a list
of leading United States and European cybersecurity regulations that are
particularly relevant for banking and financial institutions to address and how
Verimatrix can help support those efforts:


GENERAL DATA PROTECTION REGULATION (GDPR) – EU & SOME NON-EU ENTITIES

The General Data Protection Regulation, which applies to EU entities as well as
non-EU entities processing the data of EU citizens, is considered by many to be
the toughest privacy and security law in the world. Enacted in May 2018, it
applies to any organization that targets or collects data about EU citizens and
establishes specific protections for the processing of that data. 

The law was, in large part, a response to the growing numbers of people
providing their personal data to cloud service providers. Of particular
relevance to mobile apps is Article 25: Data protection by design and by
default, under which data processors and controllers are required to consider
privacy while designing new applications, systems, or processes that use
personal data. Also, Article 32: Security of processing, which requires
application developers, data controllers, and processors to implement necessary
and sufficient organizational and technical measures to assure the integrity of
processing data and deploy a level of security appropriate to the risk of
breach, loss, unlawful destruction, or modification of data.


DATA PROTECTION ACT OF 2018 (DPA) – UNITED KINGDOM

The Data Protection Act (DPA) regulates the handling of UK citizens’ personal
data. Intended to control how that personal data is used by organizations,
businesses, or the government, it sets data protection principles that require
personal data be used only for specified, explicit purposes, in a way that is
adequate, relevant, and limited to only what is necessary, accurate, and
current, and handled in a way that ensures appropriate security. 

The DPA requires organizations to inform customers about their data handling
practices and provide a way for customers to access and delete their data. It
also sets out requirements for handling data breaches, preventing unauthorized
access, and ensuring secure data disposal.


EU CYBERSECURITY ACT – EU

The EU Cybersecurity Act imposes cybersecurity obligations on all products with
digital elements whose use includes direct or indirect data connections to a
device or network. It provides an EU-wide cybersecurity certification framework
for information and communication technology (ICT) products, services, and
processes, rather than leaving a patchwork of differing regulations across
member countries. 

It introduces cybersecurity by design and by default principles and imposes a
duty of care for the lifecycle of products. The Act also grants a permanent
mandate and increased resources for the watchdog European Union Agency for
Cybersecurity (ENISA).


GRAMM LEACH BLILEY ACT – UNITED STATES

Issued by the U.S. Federal Trade Commission, the Gramm Leach Bliley Act is a
consumer protection act enacted to ensure that financial institutions protect
the privacy of consumers’ personal financial information. It regulates the
collection, usage, and disclosure of that information. For instance, it includes
efficiently delivering information and services that are financial in nature
through the use of technological means, including any application necessary to
protect the security or efficacy of systems for the transmission of data.


NETWORK AND INFORMATION SYSTEMS DIRECTIVE 2 (NIS2) – EU

Widening the scope of the original Network and Information Systems Directive,
NIS2, slated for enforcement by November 2024, is the first EU-wide
cybersecurity legislation. It is intended to enhance cybersecurity and
resilience in European organizations by improving cybersecurity risk management
practices across the EU. 

It mandates that entities must take appropriate and proportionate technical,
operational, and organizational measures to manage the risks posed to the
security of network and information systems that those entities use for their
operations or for the provision of their services, and to prevent or minimize
the impact of incidents on recipients of their services and on other services.


PAYMENT SERVICES DIRECTIVE 2 (PSD2) – EU

The Payment Services Directive 2 (PSD2) legislation requires payment service
providers to contribute to a more integrated, secure, and efficient payment
ecosystem. Beyond the first Payment Services Directive, PSD2 mandates stronger
security requirements for online transactions through multi-factor
authentication. It also forces banks and other financial institutions to give
third-party payment service providers access to consumer bank accounts if an
account holder has given their consent. 

For mobile banking apps, PSD2’s security requirements require protection against
known and unknown attacks on mobile apps. Mobile app requirements are
particularly guided by Article 9 of PSD2’2 final Regulatory Technical Standards
(RTS) on Strong Customer Authentication (SCA) and Common and Secure
Communication (CSC).

Verimatrix XTD provides passive protection through continual data monitoring and
integrates AI/ML that evolves to identify future and unknown attacks against
mobile apps. Additionally, Verimatrix provides Strong Customer Authentication
(SCA) and Common and Secure Communication (CSC) while also providing protection
against man-in-the-middle (MITM) attacks.


CYBER RESILIENCE ACT (CRA) – EU

(Legislation pending as of late 2023)

On December 3, 2023, the European Parliament and EU Council reached an agreement
to move forward with the Cyber Resilience Act (CRA). Now subject to formal
adoption by the same bodies, the CRA would go into force 20 days after being
entered into the Official Journal of the European Union.

The CRA’s intent is to set common security standards for connected devices and
services, which would make the CRA the first IoT legislation anywhere in the
world. The goal of the Act is to bolster cybersecurity rules to ensure more
secure hardware and software products, which are increasingly subject to
successful cyberattacks. This includes a breadth of mobile and IoT devices, many
of which run applications to make them useful. 

The CRA is intended to overcome a low level of cybersecurity, reflected by
widespread vulnerabilities and the insufficient and inconsistent provision of
security updates to address them; and an insufficient understanding and access
to information by users, preventing them from choosing products with adequate
cybersecurity properties or using them in a secure manner. 

Verimatrix provides mobile app security and cybersecurity for connected devices
(typically managed employee devices), while defending the enterprise against
myriad unmanaged devices powered by those apps. And now, Verimatrix XTD
(Extended Threat Defense) expands these defenses to the new unmanaged endpoint,
defending against endpoint attacks by preventing apps from being weaponized. XTD
enables configuration capabilities that only allow apps with an XTD low-risk
score to connect, adding an independent second factor of security.


U.S. STATE-LEVEL DATA PRIVACY REGULATIONS

There is no national data privacy law in the United States. However, several
individual states have passed their own regulations imposing privacy obligations
on entities handling the data of each state’s residents. Below is a list of
existing state regulations:

 * California Consumer Privacy Act 
 * California Privacy Rights Act
 * Colorado Privacy Act
 * Connecticut Data Privacy Act
 * Indiana Consumer Data Protection Act (effective 2026)
 * Iowa Consumer Data Protection Act (effective 2025)
 * Montana Consumer Data Protection Act (effective 2024)
 * Oregon Consumer Privacy Act (effective 2024)
 * Tennessee Information Protection Act (effective 2025)
 * Texas Data Privacy and Security Act (effective 2024)
 * Utah Consumer Privacy Act 
 * Virginia Consumer Data Protection Act


Given the risks associated with the widespread use of mobile applications that
are now an integral part of financial institutions’ service delivery and
business models, these organizations need trustworthy, military-strength yet
simple-to-adopt solutions that ease the burden of compliance so they can focus
on priority business concerns.


PROTECTION AGAINST MAN-IN-THE-MIDDLE (MITM) ATTACKS

Verimatrix application shielding technologies and continuous monitoring service
help safeguard information and reduce the risk of a breach, particularly
man-in-the-middle (MITM) attacks. Devices are a vulnerable attack vector because
they communicate with backend servers, potentially leaving the operation exposed
to “man-in-the-middle” attacks. Protecting client-device communication is key to
safeguarding valuable data.

Man-in-the-middle attacks occur when hackers insert themselves in the middle of
the communication. With these attacks, a customer assumes that he/she is
interacting directly with the intended component/service, but the attacker “in
the middle” is eavesdropping or changing the information to their benefit. 

For a mobile banking application, communication encryption is a combination of
industry-standard Transport Layer Security (TLS) and bespoke application layer
security. By analyzing the app, an attacker can reverse engineer the protocol
and find the cryptographic keys used to secure it. The communication protocol is
fundamental for any MFS. If an attacker understands how the communication
protocol works, they can discover and exploit its vulnerabilities. Verimatrix
shielding and monitoring service as well as its anti-debug, anti-tamper, and
anti-hook technologies, significantly reduce the chance of these types of
attacks.

Verimatrix provides comprehensive security via multi-layered solutions that
offer:

 * Code obfuscation, anti-tamper and anti-reverse engineering shields to make it
   difficult and unappealing to hack an application
 * Runtime app behavior analytics to detect abnormal activities
 * Machine learning models to identify known and zero-day threat patterns


Additionally, continuous application threat monitoring is a vital component of
protection, enabling a financial institution to gain important intelligence and
effectively deploy countermeasures. Verimatrix threat monitoring includes:

 * Real-time analysis of app stores to identify repackaged or trojanized apps
 * Monitoring developer accounts for unauthorized modifications
 * Tracking dark web forums for emerging attack tools and methods
 * Maintaining databases of known malicious IP addresses, domains and device IDs
 * Identifying anomaly patterns indicative of a breach


This enables security teams to recognize threatening activities, compromised
devices, and high-risk users early before major damage occurs. Analytics from
threat monitoring also strengthen machine learning models to better anticipate
future attacks.  Click here to schedule a demo with Verimatrix.


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Privacy Notice.



WRITTEN BY


DR. KLAUS SCHENK

Dr. Klaus Schenk is senior vice president of security and threat research at
Verimatrix and serves as head of its VMX Labs.



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