Feeds

Cambridge security boffins slam banking card readers

'Optimised to fail'

The Essential Guide to IT Transformation

Card readers for online banking are inherently insecure, according to a new study by Cambridge security researchers.

Researchers Saar Drimer, Steven J Murdoch and Ross Anderson found a number of serious security shortcomings after reverse engineering the underlying protocol (called the Chip Authentication Programme or CAP) that underpins hand-held card readers. Readers are typically used alongside customer's debit cards to generate one-time codes for online banking login and transaction authentication.

The devices are designed to thwart online banking fraud, but cost-saving measures have resulted in design compromises that have left customers open to risk of fraud.

The researchers' paper, Optimised to Fail: Card readers for online banking, presented at the Financial Cryptography 2009 conference on Thursday, explains the efforts to reduce the cost to the banks and the amount of typing done by customers have created the sort of security shortcomings akin to the introduction of Chip & PIN.

While the principle of CAP — two factor transaction authentication — is sound, the flawed implementation in the UK puts customers at risk of fraud, or worse.

When Chip & PIN was introduced for point-of-sale, the effective liability for fraud was shifted to customers. While the banking code says that customers are not liable unless they were negligent, it is up to the bank to define negligence. In practice, the mere fact that Chip & PIN was used is considered enough. Now that Chip & PIN is used for online banking, we may see a similar reduction of consumer protection.

The research was carried out by reverse-engineer hand-held card readers from UK banks NatWest and Barclays. Cryptographic problems uncovered by the Cambridge team include "reusing authentication tokens, overloading data semantics, and failing to ensure freshness of responses".

The researchers' paper, which details suggestions for increasing the security of readers, can be found here (pdf).

Previous work by the same Cambridge researchers including unpicking the security short-comings of Chip and PIN terminals, which are used to authorise card purchases in retail environments. This research highlighted the absence of encryption in the data exchanged between PIN entry devices and cards during transactions. ®

Build a business case: developing custom apps

More from The Register

next story
14 antivirus apps found to have security problems
Vendors just don't care, says researcher, after finding basic boo-boos in security software
'Things' on the Internet-of-things have 25 vulnerabilities apiece
Leaking sprinklers, overheated thermostats and picked locks all online
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Only '3% of web servers in top corps' fully fixed after Heartbleed snafu
Just slapping a patched OpenSSL on a machine ain't going to cut it, we're told
Multipath TCP speeds up the internet so much that security breaks
Black Hat research says proposed protocol will bork network probes, flummox firewalls
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Israel's Iron Dome missile tech stolen by Chinese hackers
Corporate raiders Comment Crew fingered for attacks
Fiendishly complex password app extension ships for iOS 8
Just slip it in, won't hurt a bit, 1Password makers urge devs
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.