Securing Linux-Based Financial Systems: 6 Key Considerations

September 16, 2024 - Guest Writer

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When looking at financial institutions, one would expect that they’re using advanced operating systems with complex software. While these systems are more secure and implement better technology than your next hosting, they’re still using server OS like everyone.

Linux is certainly the most popular OS for web servers. Although far behind Windows in terms of desktop popularity, Linux is dominating the web server market.

Linux has a lot of advantages, but it has also suffered significant breaches just like any other OS. This article will help you explore what are the most important aspects of Linux and how to conduct the process of securing Linux-based financial systems.

Linux for Financial Systems

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If you’ve spent some time researching enterprise tech, you’re likely met with the advantages that Linux offers. Linux is an open-source operating system, with a number of benefits in terms of security.

Because of its open-source qualities, software developers can examine the code more closely and ensure that there are no vulnerabilities or backdoors. Furthermore, this open-source nature allows you to customize the OS however you like, bringing many approaches to securing Linux-based financial systems.

Many tech enthusiasts leverage this to basically create their own operating systems. In the context of finance, this means that companies can develop Linux-based systems that maximize security and are properly optimized.

You can develop and implement your own security software, or you can leverage security features such as SELinux (Security-Enhanced Linux) and AppArmor. Linux is also cost-effective, as anyone can use it for free.

Of course, you’ll have to pay developers and administrators who will maintain these systems, but any other OS would require both investment in software and personnel. Cost-effectiveness can also be seen in the fact that Linux requires fewer resources, since you’d optimize it according to your needs and requirements.

Key Considerations for Linux Security

Securing Linux-based financial systems isn’t a single task. Instead, it consists of dozens of different processes, each aiming to solve a specific weak point of your system.

This incomplete list can help you minimize the chances of a breach occurring and make your company more compliant with relevant laws and regulations.

1. Customer verification

Financial institutions often have background checks for their customers. However, newer platforms might want to save time and resources and avoid doing the same level of due diligence. Although it can save you some money in a short time, it can lead to significant problems down the line.

By introducing AML and KYC measures, you can ensure that your customers aren’t individuals who are involved in criminal activities. You can achieve this through online services, or by using open-source alternatives such as OpenKYC, which can be integrated directly with Linux OS.

2. Use strong passwords

One of the security measures you can never go wrong with is implementing strong passwords. This principle should be implemented for both employees and customers. Employees would benefit from this as their accounts would have greater protection against malicious individuals.

Taking over an employee’s account can lead to various security risks. A wrongdoer can use the account for phishing attempts and contact customers. On the other hand, improving password security for customers can build better trust and increase their security as well.

Thankfully, Linux has PAM (Pluggable Authentication Modules), which can ensure password complexity, expiration, and history requirements across the system. An additional layer of security that PAM offers is locking accounts after a number of failed attempts.

Strong passwords should provide a defense against brute force, dictionary, and social engineering attacks. A way to construct a strong password is to make it longer than 12 characters and use a combination of upper and lower-case letters, symbols, and numbers.

However, strong passwords shouldn’t be the only safety measure against unauthorized access. Multi-factor authentication (MFA) is essential if you want to truly minimize the chances of intrusion.

With MFA, employees and users will have to provide additional authentication factors beyond just a password to verify their identity, such as a fingerprint, a one-time code sent to their phone, or a security token. The previously mentioned PAM also allows you to implement MFA for your systems.

3. Implement security tools

We’ve already mentioned some of the security features that come with Linux, but it’s always great to build upon this further. Tools such as antivirus software, intrusion detection systems (IDS), and firewalls can help you prevent certain types of attacks.

Linux systems support tools like ClamAV for antivirus protection and Fail2ban for intrusion prevention. For policies and restrictions on unauthorized access, SELinux (Security-Enhanced Linux) and AppArmor can significantly improve your defenses.

On the other hand, forensics tools can help you with responding to and documenting incidents. In a situation where a security breach unfolds, forensics tools can help you gather evidence and examine memory dumps and disk images.

4. System hardening

Linux systems in banking are unique, as financial institutions tend to run older Linux systems. The reason behind this is that these systems aren’t receiving new updates besides security patches, as new features could potentially lead to compatibility issues, security vulnerabilities, or system instability.

System hardening is a practice for securing Linux-based financial systems and refers to the process of configuring your OS in order to reduce your attack surface. Through system hardening, you can minimize the chances of hackers exploiting unnecessary or vulnerable assets.

This includes removing unnecessary services and software, disabling unused ports or configuring them, and properly installing security patches for your system. You can conduct this process manually or use tools such as Ansible or Puppet to automate it.

Linux can help you disable unnecessary services using systemctl, and remove unneeded packages with package managers like apt or yum. To ensure that all software is up to date, you can use automated patch management tools like Ansible or Puppet.

5. Ensure network security

Securing your financial system’s network infrastructure is important if you’re looking to get all-around security. Network security practices aim to ensure integrity and confidentiality of the data that’s transferred and stored.

Financial institutions often run their servers on multiple networks. This is to ensure versatility and maximal efficiency in different situations. For example, they need one server to handle bank-to-bank transactions, while another one is used for cross-border interactions.

This makes network security extremely crucial in securing your Linux-based financial systems. Furthermore, each of the different servers requires specific configurations and settings. These different servers are segmented across multiple networks in order to ensure maximum availability as every second of downtime can lead to millions of dollars in costs.

One of the most common practices for securing Linux-based financial systems is the use of firewalls. They act as a barrier between trusted and untrusted networks and help you monitor problematic traffic. You can use both hardware and software firewalls to improve your security.

Another method of improving your network security is through the use of virtual private networks. They help with ensuring secure remote access to the financial network. Data that is transferred through VPNs is encrypted and prevents interception and eavesdropping.

6. Employee training

Unfortunately, human mistake is the reason behind many breaches throughout history. Some of them happened incidentally, while other individuals aimed to harm the company’s systems. Financial institutions need to pay additional attention to their employees and their training.

Of course, you can’t expect the same level of technical proficiency in engineers and clerks, but you should aim to introduce everyone to basic cybersecurity principles. This includes knowledge of how to create strong passwords and recognize phishing.

You can always go a step further to securing Linux-based financial systems, and train employees how to protect their personal and business devices. Employees can be educated on how to use Linux tools like GPG for email encryption.

Furthermore, if you’ve leveraged some of the Linux-centric tools mentioned throughout the article, you may need additional programs targeted specifically for them.

Linux Vulnerabilities throughout the Years

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After the previous appraisal of Linux, it would be deceitful if we didn’t bring up some of the notable Linux vulnerabilities that have been observed. Some of them have been resolved, while others are still active, providing cybersecurity experts a lot to work with.

A decade ago, a vulnerability called Shellshock or Bashdoor, present in Unix systems, was discovered. This vulnerability affected the Bash shell, which is a program in Unix-based systems that executes command lines and scripts. It allowed attackers to conduct attacks by running a specially prepared environment variable.

Attackers managed to exploit this bug, and they’ve leveraged it to attack systems using denial-of-service attacks. Shellshock had the potential to affect millions of devices, but thankfully it was patched in less than two weeks after the discovery.

A couple of years later, in 2016, Dirty COW was discovered by Phil Oester. This vulnerability affected all Linux-based operating systems, including Androids. It gave attackers root access by exploiting a race condition in the memory management system.

It was used to root Android devices up to Android Nougat. Although resolved, Dirty COW is still present in outdated Linux systems. This just shows how important it is to keep up with the latest updates and avoid using outdated systems if you want to maximize the process of securing Linux-based financial systems.

In recent years, we’ve had the chance to see some problems as well. For example, in 2022, a critical remote code execution (RCE) problem called Text4Shell was discovered. Another issue was discovered in the Linux kernel in 2023, which allowed attackers to conduct DoS attacks on remote computers.

Securing Your Company’s Systems Is Essential

There isn’t a one-size-fits-all solution for cybersecurity. Furthermore, there aren’t methods to secure Linux-based financial systems 100% against all threats. Financial institutions need to do what’s in their power to ensure maximum security for their users.

Starting from governmental laws to international regulations, suffering a cybersecurity breach can lead to all kinds of problems. From bankruptcy up to fines and blows to your reputation, you can lose your customers’ trust.

These security considerations can significantly help with improving your financial system’s security, yet it’s always best to conduct regular security audits and tackle your weakest points.

In the long run, high security standards will prevent all kinds of threats and maximize your availability. You’ll also be more likely to build a great reputation, and customers will potentially flock toward you instead of your competitors – who may have suffered security problems in the past. No cost is too high for cybersecurity.

Summary