The increasing online and cloud dependence of modern-day businesses has created a larger ground for cyber attacks. The expanding reliance on API gateways to provide holistic services also widens the cyber attack surface for criminals to target and exploit at their will. Implementing a strong and proactive attack service management strategy helps organizations fortify their assets. However, if a company personnel uses software applications outside of the company’s recommended vendor list without informing, it may open the business to potential cyber threats from these unfamiliar entities.

Often termed shadow IT assets, those unapproved and often unmanaged third-party assets within an organization, pose significant security challenges due to lack of oversight. As organizations expand their online presence, maintaining a clear, updated inventory of external and internal assets becomes essential. In a panel discussion with Nikhil Srivastava, the panelists dived into the importance of bug bounties, External Attack Surface Management (EASM), and shadow IT identification that helps businesses secure these unknowns and enhance cyber resilience.

What Are Shadow IT Assets?

Shadow IT assets refer to any software, computing system, or tool used by the company employees without explicit IT authorization. Shadow IT can involve various unapproved applications used by end users like unapproved cloud channels, productivity tools, messaging applications, form uploads, external input methods, or unauthorized browser extensions. Even if not of a malicious origin, these unapproved Shadow IT assets create a considerable gap in third-party risk management and can leave loopholes unmonitored for potential cyber threats. According to a 2022 IBM-Randori joint study report, around 69% of businesses have been affected by unapproved and unmanaged Shadow IT assets. This study highlights the critical need to improve their efforts with attack surface monitoring to avoid such cyber risks.

Bug Bounties in Identifying Vulnerabilities

Bug bounty programs are initiatives where ethical hackers, known as researchers or hunters, are rewarded with financial or other incentives for identifying vulnerabilities and possible attack surfaces in a company’s systems. By reporting existing bugs or weak links, these programs help companies discover weaknesses before malicious actors can exploit them. This practice allows business owners with limited resources to tap into the expertise of ethical hackers with various skill sets to gain an advantage over testing their sites to discover possible weaknesses.

During the panel discussion, Nikhil mentioned an incident involving a bug bounty for a leading UAE bank, where a simple file upload vulnerability in an obscure form could have led to Remote Code Execution (RCE). The company was unaware of this vulnerability until Mr. Srivastava uncovered the critical risk, highlighting the value of this proactive security approach.

The Bug bounty program involves some amount of pen testing, also known as penetration testing, to determine the security health and check for system vulnerabilities.

Benefits of Bug Bounties

When a business launches a bug bounty program, it helps them gain actionable insight into their online system and its security status. Some of the most effective advantages of using bug bounty programs are:

Expanded Outreach

One of the prime benefits of using bug bounties for cybersecurity testing is the broader outreach into the white hacker community across the globe. This allows your system weakness to be identified by a group of potential experts with diverse skills and increases the chance of identifying the threats.

Flexibility

Bug bounties often tend to be open on the internet as a continued program, allowing your company assets continuous oversight by experts through the lifecycle of the software. In this program, the involved bug bounty experts, also known as researchers, can test the security of a software upgrade as soon as it is released, with a simple notification queued for them.

Cost-Effectiveness

The payment structure of bug bounties makes it more affordable than traditional security assessments, especially for organizations with limited resources. The payment is made based on the result and not the time devoted by the researcher, making the company payable only to researchers who can produce proof of threat detection and the level of their criticality.

High Return of Interest (ROI)

As the reward on bug bounties is offered in a pay-per-result manner, the companies are not required to pay a sum in the absence of threat detection. Additionally, the price of bug bounties is determined based on the criticality of the vulnerability, the number of threats detected, and their financial impacts. This also increases the ROI of these programs, making this a profitable investment for businesses.

Understanding Shadow IT: Risks

Shadow IT assets are typically unmanaged and may run outdated software, increasing their vulnerability and shadow IT risks. Additionally, the undiagnosed nature of the application makes these assets susceptible to misconfiguration of password repetitions. Zero-day exploits—exploits that target unknown vulnerabilities in software or hardware—can also lurk within these shadow IT resources, exposing organizations to cyber risks without them knowing.

Indicators of Shadow IT Problems

Organizations can gauge if they have a shadow IT issue by comparing internal asset inventories against external scans. For instance, if a configuration management database (CMDB) shows 700 internet-facing assets, but an external scan shows 1,000, some assets are likely untracked and unmanaged.

In one instance, mentioned by Nikhil during the panel discussions, a client was surprised to learn that an internal API was exposed on the internet, highlighting the organization’s shadow IT challenges. Such cases underscore the need for continuous, comprehensive asset inventories.

Bug Bounty Program for Vulnerability Detection

An effective bug bounty program allows businesses to leverage the power of the online ethical hacking community to detect and battle system vulnerabilities. However, without a good strategy, a bug bounty program will not be able to produce the desired effect. 

How to Establish a Bug Bounty Program

A bug bounty program allows businesses to explore their system vulnerabilities without having to build complex security teams. To build an effective bug bounty program, businesses need to follow a few crucial steps.

• Scope Definition: Prepare an outline detailing which assets and applications are in scope and specify the target URLs and locations to be checked for vulnerabilities to avoid unauthorized access to sensitive areas.

  
  

• Category Specifications: When setting up Bug Bounty programs, make sure to specify the category of your cyber asset for the researchers to have a clear understanding.

  
  

• System Setup: Ensure that systems can handle multiple requests from bug hunters without impacting production.

  
  

• Legal Safeguards: Establish legal protections for both the organization and participants to encourage responsible disclosure and safety of your sensitive assets and information.

The Importance of Asset Inventory in Bug Bounties

Asset inventories are a crucial part of setting up a bug bounty program. An up-to-date asset inventory helps businesses specify the assets that the experts will need to use for pen testing. It also ensures that bug bounty hunters focus on the most relevant assets. Without a comprehensive inventory, organizations risk leaving critical assets vulnerable to third-party experts.

Attack Surface Management (ASM) and Its Importance

External Attack Surface Management or EASM involves monitoring and managing the external-facing components of an organization’s infrastructure. In this threat management practice, the organization monitors all system access points to detect potential weak points and system vulnerabilities. Continuous observation also helps businesses identify threats in real-time, helping them prevent serious or major damage.

Why EASM Is Crucial for Security Strategies

External Attack Surface Management accounts for the external vulnerabilities and security loopholes. Implementing EASM strategies helps businesses fortify their online presence and resolve threats before they can be manipulated by external actors. According to a recent report by Verizon, 87% of cyber breaches originate from external threats created by malicious third-party actors. Hence, it is crucial for businesses to adopt proper strategies that can address such security risks on time.

How EASM and Threat Intelligence Enhance Security

Advanced External Attack Surface Management solutions integrate threat intelligence, enabling companies to receive real-time insights about vulnerabilities and potential threats. For instance, a Cloud Attack Surface Management solution can notify security teams if a company’s server is being used in a botnet or is vulnerable to a new exploit.

Advanced Techniques in Attack Surface Exploration

Monitoring the attack surfaces allows businesses to gain real-time insights into the system’s integrity and all potential vulnerabilities. Staying up-to-date on this crucial data helps businesses fortify their security systems and protect assets ahead of cyber attacks, preventing data and reputation loss.

Some of the most effective ways to gain actionable insight into attack surface are:

Reconnaissance and Monitoring Tools

Pen testing or Penetration testing is a highly effective testing technique to identify security threats in advance. Reconnaissance also known as recon is the initial stage of penetration testing. The testers use advanced reconnaissance tools to perform tasks like continuous monitoring of assets, including monitoring for new subdomains or open ports, to help detect newly emerging vulnerabilities that may otherwise go unnoticed.

Leveraging Automation and Machine Learning

As the attack surface grows with time, the surface management becomes more complicated. Additionally, with time, cybercriminals are also becoming more creative with their attack tactics and patterns. Detecting such evolving attack patterns can be challenging for human analysts. Modern EASM solutions and Cloud Attack Surface Management solutions, however, use machine learning to improve the accuracy of asset discovery. For example, deep learning algorithms can analyze image data to identify and categorize websites and applications. Large Language Models can also be used to identify suspicious traffic behavior and detect attack paths.

How APIs Contribute to Shadow IT

APIs are the backbone of modern applications, contributing majorly to the oncoming web traffic. However, left unchecked, these API gateways can become security risks. Developers often deploy APIs without updating security inventories, leading to “shadow APIs”. These undocumented gateways can leave vulnerable access paths into the company system to be exploited by external agents.

Best Practices for API Security

Use API Management Tools: Solutions like AWS API Gateway and Postman can provide authentication and rate-limiting controls to secure APIs.

Implement an API Inventory System: API inventory tools help identify APIs deployed in production and ensure all endpoints are properly secured.

The Growing Threat of Supply Chain Attacks

A supply chain attack exploits third-party vendors and their vulnerabilities to target a network system. As these vendors have access to your business data and online system, gaining access to their network can compromise your data security as well. These attacks are challenging to defend due to the wide range of dependencies in modern applications.

Recent Supply Chain Attacks and Their Impact

In July 2024, a software bug in one of the popular American cybersecurity companies caused a worldwide blackout in Microsoft systems using the particular security platform. This outage took out over 8 million computer systems across the globe, crippling various industries, like airlines, banking, healthcare, etc. across the globe.

Mitigating Supply Chain Risks

Organizations should regularly monitor their supply chain vendors for vulnerabilities, security updates, and possible upgrades, and conduct comprehensive software component analyses. Tools that maintain software inventory and track dependencies can help track, identify, and mitigate such security risks.

Proactive Defense for Comprehensive Security

Bug bounties, Cloud Attack Surface Management, and API security management are essential components of a proactive security strategy. By continuously monitoring and managing both known and unknown assets, organizations can reduce their exposure to threats. It also allows organizations to stay ahead of external malicious elements in detecting vulnerabilities, helping them address and resolve such weak points before an incident.

Future of Attack Surface Management and Bug Bounties

The evolving advancements in AI and machine learning technologies, Cloud Attack Surface Management, and bug bounty programs provide organizations with robust tools to stay ahead of cybercriminals. The importance of shadow IT management, real-time vulnerability detection, and secure APIs cannot be overstated in today’s fast-evolving cyber landscape.

Organizations can take a proactive and holistic security approach to asset management and security encompassing a robust bug bounty program, up-to-date External Attack Surface Management solutions, and continuous monitoring to offer advantageous digital brand protection against emerging threats.

As the cybersecurity landscape evolves, so too must the methods we use to secure our networks and applications. With a proactive defense strategy, companies can minimize unknown risks, safeguard sensitive data, and build a stronger, more secure digital future.