DLT for IT service providers in the banking environment

SRC expert Botermann | DLT for IT service providers in the banking environment

Crypto assets based on blockchains move many states, companies and the world of banks and their IT service providers.

Distributed ledger technology (DLT for short) is the term used to describe the technology of “distributed cash ledgers”. The key difference: trans­ac­tions are legit­imized in a decen­tralized manner and stored with the partic­i­pants. As a disruptive technology, DLT makes numerous inter­me­di­ation and clearing points redundant. Banks are threatened with the loss of their position as anchors for trust­worthy transactions.

But this is precisely where the prospects for future business models lie, since it is precisely the banks that tradi­tionally have expertise in the safekeeping of confi­dential infor­mation. The decisive technical trust anchor of every trans­action via DLT is the customer’s private key. The trusted management of this private key may prove to be a perspective for the evolution of banks’ business models.

To summarize: DLT appli­ca­tions offer IT service providers in the banking environment good oppor­tu­nities to adapt their own business models and also position themselves for the future. Services in the crypto custody business can be seen as a suitable entry point, which can be expanded and supple­mented in the future.

How can business models in the banking environment be adapted to these devel­op­ments? What oppor­tu­nities does the crypto custody business offer? What technical and regulatory require­ments must be met?

In the articles DLT for IT service providers in the banking environment (german), crypto custody business: starting point for business field expansion (german) and crypto custody business as a business area expansion for banks (german) published in gi GELDINSTITUTE and on cash.online, SRC expert Dr. Benjamin Botermann gives an insight and overview of challenges, oppor­tu­nities and stopler stones of the crypto custody business with distributed ledger technology (DLT).

The SRC experts will follow the exciting devel­op­ments in the field of cryptocur­rency and digital euros for you and support you in the realization of your crypto­custody business. We will be happy to inform you about the possi­bil­ities to get involved in this innov­ative sector.

Kick-off for the Digital Euro

Kick-off for the Digital Euro

After long and intensive discus­sions at the European level, the starting signal for the digital euro was given on 14 July 2021. First, core questions on the impact on financial stability and monetary policy as well as on the legal framework and a possible technical imple­men­tation will be clarified within the framework of a two-year study phase. The goal of the intro­duction of the digital euro is still to meet the “needs of the people in Europe” and to serve as a supplement to already estab­lished payment procedures.

A final decision on the design of the digital euro is then expected after the study phase in mid-2023.

“We will enter into a dialogue with the European Parliament and other European decision-makers and inform them regularly about our findings. Individuals, merchants and the payments sector will also be involved,” said Fabio Panetta (Member of the ECB Executive Board and Chair of the Digital Euro Task Force).

Results of the practical test

The preparatory basis for the landmark decision was the results of a practical test phase over nine months, which examined, among other things, technical aspects of distributed ledger technology (DLT for short), data protection, anti-money laundering and the use of existing systems (e.g. TARGET Instant Payment Settlement — TIPS for short). Energy aspects of possible archi­tecture concepts were also inves­ti­gated with the aim of limiting energy consumption to well below the current require­ments of known cryptocur­rencies, e.g. Bitcoin.

Focus on data protection

Consumer protection and data protection aspects are central aspects of the discussion about the digital euro, in addition to the technical imple­men­tation. For consumers, the digital central bank money repre­sents a direct claim against the central bank, which under certain circum­stances can be limited by a cap in the “wallet”. The compe­tition of the digital euro with cash becomes clear in the discussion about the anonymity of payments. It seems clear that — also with a view to combating money laundering — there will be no completely anonymous digital euro.

Assessment of the German Banking Industry

In a statement, the “Deutsche Kreditwirtschaft” empha­sises the digital euro above all in its preser­vation of the monetary sover­eignty of the Eurozone. The digital euro is assessed as a forward-looking means of payment in a digital economy, which coher­ently comple­ments the existing and proven systems and struc­tures. The aim should be to achieve the greatest possible synergies with existing payment solutions so that access to the digital central bank money can be secured for end consumers. There is a consensus that digital­i­sation is changing payment trans­ac­tions and that the ECB must carefully design the digital euro to ensure financial stability. In order to implement the envisaged activ­ities, high invest­ments are inevitable for both the insti­tu­tions and the economy.

Will cryptocur­rencies become more than specu­lative objects?

Estab­lished cryptocur­rencies such as Bitcoin and Co. are gaining impor­tance as specu­lation objects in asset management, but they are currently rather meaningless in payment trans­ac­tions. Never­theless, the ongoing discussion about private cryptocur­rencies, e.g. Diem from the Facebook universe, has certainly driven the discussion about the Digital Euro.

The SRC experts follow the exciting devel­op­ments in the field of cryptocur­rency and the Digital Euro for you and support you in the reali­sation of your crypto custody service. We will be happy to inform you about the possi­bil­ities to get involved in this innov­ative sector.

CASH.DIGITALWEEK 2021 // Webinar: Cryptocurrencies create market opportunities for banks and financial service providers

CASH.DIGITALWEEK 2021 // Webinar: Cryptocur­rencies create market oppor­tu­nities for banks and financial service providers

In a webinar at CASH-DIGITALWEEK 2021, our expert Dagmar Schoppe will explain how cryptocur­rencies can create new market oppor­tu­nities for banks and financial service providers. The date for the webinar is Thursday, 9 September 2021 at 11:00.

Banks and financial service providers tradi­tionally have not only the technical compe­tences to process trust­worthy business trans­ac­tions, but also the necessary expertise to implement regulatory require­ments. This can be used well as an entry point into the market for services related to cryptocur­rencies, because it is precisely the rapidly growing interest in cryptocur­rencies that opens up growing oppor­tu­nities for credit insti­tu­tions to become active in this market and to serve customers here as well.
For this, it is necessary that the insti­tu­tions increase their visibility in this new market segment. Only in this way can they then respond to enquiries from customers, traders as well as service providers. Corporate customers thus also have the oppor­tunity, for example, to offer cryptocur­rencies they have issued themselves or to optimally support their customers’ digital business processes using blockchain technology. With the support of banks and financial service providers, corporate clients can further advance the digital­i­sation of their business processes.

The SRC experts are following the exciting devel­op­ments in the field of cryptocur­rency for you. During the webinar “CASH.DIGITALWEEK 2021 // Webinar: Cryptocur­rencies create market oppor­tu­nities for banks and financial service providers”, Dagmar Schoppe, Head of Banking Compliance at SRC, will explain possible strategies and answer partic­i­pants’ questions.

SRC provides expert opinion for Gematik's E-Rezept

SRC provides expert opinion on e‑prescription for gematik

IT security plays a special role in the digital­i­sation of the healthcare system. In the context of the intro­duction of the electronic prescription (e‑prescription) for which gematik is respon­sible, the security of all compo­nents will be tested by independent experts approved by gematik.
The intro­duction of the e‑prescription and the e‑prescription app started on 1 July 2021. By then, data security for patients, doctors and pharma­cists had to be ensured. In order to check the security of these appli­ca­tions in their daily work, gematik, with the approval of the Federal Office for Infor­mation Security, commis­sioned several expert opinions to test the appli­ca­tions. Some of these expert opinions were prepared by the experts of the SRC. The result: Nothing stands in the way of a controlled commis­sioning into production operation. The appli­ca­tions can be integrated into the telem­atics infra­structure (TI).

The prereq­uisite for the test phase that now follows is the security assessment, in which the SRC assessors were involved for two compo­nents. SRC employees have been accredited as experts by gematik since 2014 and have assessed the identity provider service of RISE as well as the specialist service e‑prescription of IBM. gematik published the summary of the expert reports prepared by the SRC experts on its website on 1 July 2021.

In the test phase that has just started, the e‑prescription is now being tested in everyday practice in the model region of Berlin-Brandenburg. Here, practical findings on the inter­action of all compo­nents involved in the e‑prescription are to be collected first. The nationwide intro­duction of the e‑prescription is being prepared for the 4th quarter of 2021.

Every person with statutory health insurance can use their NFC-enabled electronic health card (eGK) with the corre­sponding PIN for the e‑prescription. The eGK is issued as standard by the statutory health insurance funds to their insured persons.
From 2022, the e‑prescription will be oblig­atory for all those insured by the statutory health insurers, but private health insurers have already made clear their interest in partic­i­pating in the e‑prescription. For the time being, private health insurers can decide volun­tarily whether to issue the eGK to their insured.
“The intro­duction of the e‑prescription and the associated app is undoubtedly a milestone for the digital­i­sation of the German health system. At SRC, we are a little proud to have contributed to securing this solution with our work,” says Randolf Skerka, Head of IS Management at SRC.
“This assessment was charac­terised by smooth and intensive coordi­nation with the manufac­turers RISE and IBM as well as gematik. Only in this way was it possible to ensure the high quality in the short time available,” says Dr. Jens Putzka on behalf of all colleagues involved at SRC.

LANCOM 1900EF

Lancom 1900EF VPN Router receives first Accel­erated Security Certi­fi­cation (BSZ)

The BSI has granted LANCOM Systems GmbH the first certificate according to the new BSI scheme “Accel­erated Security Certi­fi­cation” (BSZ for short). In this pilot procedure, SRC evaluated the security features of the Lancom 1900EF VPN Router and finally recom­mended approval to the BSI.

LANCOM has already had the security of its solutions tested and confirmed or certified by SRC in many proce­dures using Common Criteria evalu­a­tions or penetration tests. With the pilot evalu­ation for the BSZ, the BSI, LANCOM and SRC have jointly set a further standard for the certi­fi­cation of IT security solutions, with the aim of achieving time-to-market certification.

The Accel­erated Security Certi­fi­cation (BSZ) allows manufac­turers to have their products evaluated and certified by the BSI within a specified period of time. The evalu­ation must be carried out by a test centre recog­nised by the BSI. With the BSZ, the total effort of the evalu­ation, in comparison to e.g. Common Criteria evalu­a­tions, is prede­ter­mined from the beginning (fixed time). This allows manufac­turers to estimate the expected effort well.

When designing the attack scenarios, the BSZ allows the evalu­ators a relatively large leeway. This test catalogue must be presented to the BSI exten­sively and in detail. This design leeway demands an above-average degree of expertise, care and creativity from both the evalu­ation facility insti­tution and each individual evaluator. The test catalogue and the final evalu­ation in the test report draw on a broad know-how of cryptog­raphy, penetration tests, protocol attacks. The imple­men­tation by the manufac­turer is evaluated by the test centre and the respon­sible persons at SRC have to defend this against the critical view of the BSI.

“Accel­erated security certi­fi­cation will certainly play a major role, especially in the field of IOT devices,” says Gerd Cimiotti, Managing Director of SRC Security Research & Consulting GmbH. Like Lancom and the BSI, he expresses his thanks for the profes­sion­alism on all sides with which this pilot procedure was ultimately brought to a successful conclusion.

Ralf Koenzen, founder and managing director of LANCOM Systems GmbH, gives the manufacturer’s perspective: “When you do something for the first time, the effort is always greater. It is precisely then that you feel the experience and expertise of a partner like SRC as orien­tation and noticeable relief.”

As a long-standing partner of the BSI, SRC has already carried out a large number of projects in the most diverse approval schemes. SRC is currently in the process of being recog­nised as a test centre for accel­erated security certification.

We would also be happy to accompany your accel­erated security certi­fi­cation. If you have any questions about the BSZ, please do not hesitate to contact us.

AI security: The right measure for regulating AI

AI security: The right measure for regulating AI

Precisely because of their enormous potential, their diverse areas of appli­cation and their ability to learn, artificial intel­li­gence (AI) systems must be and remain safe and control­lable at the same time. Here, it is important to find the right balance in regulation.

Voice assis­tants, trans­la­tions at the push of a button, predictive mainte­nance or applicant management systems. Despite the diverse areas of appli­cation, artificial intel­li­gence (AI) is only at the beginning of its devel­opment. many of the future areas of appli­cation are not even foreseeable yet. This opens up great oppor­tu­nities for devel­opers and manufac­turers to achieve compet­itive advan­tages with improve­ments based on the use of artificial intelligence.

In addition to further coordi­nation, a great deal of detailed work will now have to be done in the future; the corre­sponding norms and standards will have to be worked out or adapted and proce­dures for conformity assessment will have to be developed. In doing so, the organ­i­sa­tional and technical effort for manufac­turers should be kept within reasonable limits so as not to hinder the devel­op­ments of AI systems. At the same time, it is also important to gain economic and social trust in this promising technology.

Under the german title “KI-Sicherheit: Das richtige Maß zur Regulierung von KI finden”, the magazine “it-daily” gave Randolf-Heiko Skerka, Division Manager IS Management at SRC Security Research & Consulting GmbH, the oppor­tunity to comment comprehensively.

If you are inter­ested, we look forward to hearing from you.

IT Security Act 2.0 approved by the Bundesrat (Upper House)

IT Security Act 2.0 approved by the Bundesrat (Upper House)

On Friday, 07 May 2021, the Bundesrat finally approved the contro­versial IT Security Act 2.0. The Bundestag had already approved it at the end of April 2021. In this regard, Federal Minister of the Interior Horst Seehofer spoke of a “good day for cyber security in Germany”. He commented: “Digital­i­sation permeates all areas of life, and the pandemic has once again accel­erated this process enormously. Our protection mecha­nisms & defence strategies must keep pace — this is what the IT Security Act 2.0 is for”. As early as November 2020, the discussion about the IT Security Act was reignited with a third draft bill. In terms of content, many aspects that were already the subject of the government draft from 2020 have been retained. However, they have been modified in detail. Thus, the continuing industry-wide criticism of the IT Security Act 2.0 seems hardly surprising.

Expanded powers for the BSI, inventory data disclosure and the so-called “Huawei clause

A central aspect of the new IT Security Act is the expanded powers for the Federal Office for Infor­mation Security (BSI). There are improve­ments in the draft law at least in the concreti­sation of overriding protection goals and the work of the BSI geared to them. In addition, the handling of vulner­a­bil­ities and security gaps is to become more trans­parent. The new law is intended to make the BSI a key player in the fight against botnets and the spread of malware. To this end, 799 new positions will be created.

Detection of security vulnerabilities

The BSI will be empowered to detect security vulner­a­bil­ities at the inter­faces of IT systems to public telecom­mu­ni­ca­tions networks by means of port scans. In addition, it will be allowed to use honeypots and sinkholes to analyse malware and attack methods.

Storage and collection of inventory and log data

A partic­u­larly critical aspect of data protection is that in future the BSI will be allowed to store and evaluate “log data” and personal user infor­mation (such as IP addresses) generated during online commu­ni­cation between citizens and federal admin­is­trative insti­tu­tions for a period of 12 to 18 months. This also includes internal “logging data” from the author­ities. Furthermore, the BSI may obtain inventory data infor­mation from providers of telecom­mu­ni­ca­tions services. This is intended to protect those affected and to detect attacks, e.g. by Trojans such as Emotet.

The so-called “Huawei clause” — hurdle for the exclusion of equipment suppliers

The so-called “Huawei clause” sets the hurdle for the exclusion of individual equipment suppliers from network expansion for 5G, for example, quite high. It is also part of the amendment. The federal government is to be able to prohibit the use of “critical compo­nents” in the event of “probable impairment of public safety and order”. To this end, there will be a certi­fi­cation oblig­ation and manufac­turers will have to issue a guarantee declaration.

In this regard, the BSI tweets in the sense of a “self-image” that security vulner­a­bil­ities will be commu­ni­cated trans­par­ently and remedied quickly, consumers will be provided with even more neutral, up-to-date infor­mation on digital topics and critical infra­struc­tures will be supported with close-meshed advice and supervision.

Strength­ening consumer protection and more security for businesses

In addition, the new IT Security Act contains regula­tions to strengthen consumer protection and increase security for companies. To this end, consumer protection is included in the BSI’s catalogue of tasks. Furthermore, a uniform IT security label will in future make it clear to consumers which products already comply with certain IT security standards.

In order to increase corporate security, operators of critical infra­struc­tures and, in the future, other companies in the special public interest (e.g. arms manufac­turers or companies of partic­u­larly great economic impor­tance) must implement certain IT security measures and will be included in the trustful exchange of infor­mation with the BSI.

Draft of a second ordinance amending the BSI Criti­cality Ordinance (BSI-KritisV) published

The IT-SiG 2.0 not only refers to the Critis Ordinance, it also expands the existing oblig­a­tions of the CRITIS operators. For this reason, it is not surprising that on 26 April 2021, the Federal Ministry of the Interior published the draft of a second ordinance amending the BSI Critis Ordinance as part of the consul­tation of associ­a­tions, specialist groups and academia. Corre­sponding comments are to be submitted by 17 May 2021.

The draft bill contains consid­erable changes and adjust­ments to the content as well as new additions in the individual annexes to determine the categories of instal­la­tions and concrete threshold values, in particular in part also the individual numerical assessment criteria. In addition, software and IT services that are necessary for the provision of a critical service are now also identified as invest­ments within the meaning of the regulation. Furthermore, trading in securities and deriv­a­tives is included as a new critical service.

Support from SRC experts

The SRC experts will be happy to exchange views with you on the innova­tions as well as their effects and support you in the imple­men­tation of the require­ments from IT-SIG and BSIG as well as in the provision of evidence within the scope of §8(a) BSIG (“Critical Service Examination”).

IT security in the health sector: Regulation is necessary and overdue

IT security in the health sector: Regulation is necessary and overdue

Open inter­faces, outdated technology and different interests: IT security in the health sector is a complex topic, after all it is about the needs and safety of the patient. A major problem is the lack of regulation on the part of author­ities such as the Federal Institute for Drugs and Medical Technology and the Federal Office for Infor­mation Security — currently there are only recom­men­da­tions but no binding guidelines.

The Federal Office for Infor­mation Security (BSI), the Federal Institute for Drugs and Medical Devices (BfArM) and gematik are the competent author­ities for IT security of medical devices in Germany. It must be ensured that unautho­rised persons cannot use the IT in medical devices and systems against the patient and that compo­nents and systems are only open to autho­rised persons. Companies special­ising in IT security, such as SRC Security Research & Consulting GmbH from Bonn, can help here. Regulation is necessary to create security standards — although a sense of proportion is needed here. Because over-regulation can also cause damage.

Under the title “IT Security in the Healthcare Sector: Regulation is necessary and overdue” (german), the magazine “all about security” gave Randolf-Heiko Skerka, Head of IS Management at SRC Security Research & Consulting GmbH, the oppor­tunity to comment comprehensively.

If you are inter­ested, we would be pleased to hear from you.

BSI publishes CC certifi­cates of connectors in the healthcare sector

Within the framework of the gematik telem­atics infra­structure, a connector coordi­nates and encrypts the commu­ni­cation between the client system, eGK, HBA/SMC and the central telem­atics infra­structure. It thus repre­sents the link between these compo­nents on the decen­tralised service provider side and the central telem­atics infrastructure.

A connector fulfils security require­ments that have been laid down in corre­sponding protection profiles.

The connector in product type version 3 comprises the following components:

  • the network connector,
  • the appli­cation connector including a signature application,
  • the specialised modules “Versicherten­stam­m­daten­man­agement” (VSDM), “Notfall­daten­man­agement” (NFDM) and “Arneimitteltherapiesicherheit/elektr. Medika­tion­splan” (AMTS/eMP).

SRC has success­fully evaluated the network and appli­cation connector in product type version 3 of the company Research Indus­trial Systems Engineering (RISE) Forschungs‑, Entwick­lungs- und Großpro­jek­t­ber­atung GmbH. The certifi­cates BSI-DSZ-CC-1052-V3-2021 and BSI-DSZ-CC-1132–2021 have been published by the BSI.

In addition SRC has success­fully evaluated the network and appli­cation connector in product type version 3 of the company secunet Security Networks AG. The certifi­cates BSI-DSZ-CC-1044-V3-2020 and BSI-DSZ-CC-1135–2020 have been published by the BSI.

For questions about Common Criteria or other evalu­a­tions, please contact us.

Certification of fiskaly Cloud Crypto Service Provider

Certi­fi­cation of fiskaly Cloud Crypto Service Provider

Among other things, the Tax Code provides for a combi­nation of technical and organ­i­sa­tional measures to effec­tively prevent manip­u­lation of digital basic records. The core of the tax code is a certified technical security device (TSE for short). The TSE is the central technical component for securing the basic records against subse­quent manip­u­lation. The certi­fi­cation aims to ensure a uniform minimum level of trust and security in the TSE as well as compliance with necessary inter­op­er­ability requirements.

Cash register systems carry out digital basic records in the above sense. Therefore, the cash register security ordinance of the Federal Ministry of Finance specifies require­ments for the certi­fi­cation of TSEs, which have been imple­mented accord­ingly by the BSI. These include detailed require­ments for the security module, the storage medium, the digital interface and the electronic storage, which have been published in the form of several technical guide­lines and protection profiles.

The central security component of a TSE is a so-called Crypto­graphic Service Provider (CSP). This is the component that performs the crypto­graphic signature opera­tions and securely manages essential compo­nents such as crypto­graphic keys and other parameters.

The BSI has certified fiskaly’s CSP Light based on the evalu­ation results of the SRC. This CSP Light is imple­mented as a cloud service to enable integration into networks.

In contrast, CSPs can also be created in the form of smart cards for stand-alone systems. Such products have also already been evaluated by SRC.