If any industry should readily grasp the concepts of economics and market-based forces, it’s the Financial Services industry. Yet, of the 7,000 or so financial organizations in the United States, only a small handful even have public vulnerability disclosure policies.
So why haven’t Financial Services firms been more open to hacker-powered security, especially given the sensitive financial and personal information they gather and store?
That’s exactly what Sean Sposito, Fraud & Security Analyst at Javelin Strategy & Research, asked a panel of Financial Services security leads during HackerOne’s Security@. The panel included Ty Sbano, Information Security Lead at LendingClub, Arun Agrahri, Product Engineering Executive at Twine by John Hancock, and Philip Martin, Director of Security at Coinbase.
From left to right: Sean Sposito, Arun Agrahri, Ty Sbano, and Philip Martin on stage at Security@ San Francisco
The biggest challenge, the panel explained, is their industry’s legacy approach to business in general. “Some of these companies are 100 years old,” said Arun. He added that even their own technology is built by others. So it’s not an industry problem, he explained, it’s a gap between incumbent firms and the newer Fintech companies.
Phillip, who mentioned that Coinbase just upped their top bounty award to $50,000, pointed to the Financial Services back office as part of the challenge. “You can’t just go to finance and tell them you’re paying 10 Bitcoin to some dude on the internet,” he added. The legal, financial, and regulatory hurdles are just too risky for most of these companies.
But the tide is shifting, and firms are realizing that the economics of hacker-powered security outweigh the risks. Arun explained how bounty programs are more cost-effective than expanding an internal security team. Ty mentioned incentives, and how bounty programs provide positive incentives for both sides. And, Phillip added that it also gives hackers a way to get a return on their own time investment.