Why VAPT is Critical for Financial Services and FinTech

In 2024 alone, banks and financial institutions witnessed an alarming escalation in cyberattacks. According to the Indusface State of Application Security Report 2025, over 1.2 billion attacks targeted this sector, with each financial application experiencing twice as many attacks per site compared to the global average. Even more concerning, attacks on known vulnerabilities surged 74% between Q1 and Q4.

As digital banking expands through open APIs, mobile apps, and SaaS integrations, so does the attack surface and traditional scans just cannot keep up. They miss chained exploits, misconfigurations, and business logic vulnerabilities that attackers love to exploit.

That is where Vulnerability Assessment and Penetration Testing (VAPT) steps in. It is no longer optional; it is your front line of defense against sophisticated threats. Done right, VAPT reveals the gaps that matter most, empowering teams to patch before the attacker’s pounce.

Why Financial Services Need VAPT

Financial institutions operate under a complex threat matrix. They face internal threats (misconfigurations, unpatched systems), external attackers (malware, ransomware, phishing), and indirect risks via third parties and vendors. VAPT helps financial organizations address all of these by simulating real-world attacks to:

• Uncover latent vulnerabilities across applications, APIs, infrastructure, and endpoints.
• Validate defenses against actual attacker techniques.
• Prioritize remediation based on severity, exposure, and business impact.

In sectors like fintech, the attack surface is even more fragmented. With mobile-first products, open banking APIs, and fast release cycles, security testingmust be tailored and continuous. VAPT ensures that even business logic vulnerabilities are detected and validated by human experts.

The Financial Sector’s Evolving Threat Landscape

Some of the most frequent and damaging cyberattacks targeting financial firms tod:

1. Ransomware Attacks

Between April 2024 and April 2025, financial institutions suffered 406 publicly disclosed ransomware incidents, demonstrating the sector’s prominence as a high-value target. These attacks now feature double-extortion tactics, data theft combined with encryption, to apply pressure. Regulatory authorities such as CISA and banking regulators emphasize ransomware as a systemic threat, underscoring the need for proactive vulnerability and access control management.

2. Exploitation of Known Vulnerabilities

Multiple financial breach investigations confirm that attackers often exploit misconfigured servers, outdated software and other open vulnerabilities. These entry points are particularly dangerous in institutions that rely on legacy systems or lack centralized patch management.

Global regulators, including the Federal Reserve and RBI, have highlighted vulnerability exploitation as a key concern, urging financial firms to adopt frequent scanning, patch validation, and external surface monitoring to detect exploitable weaknesses.

3. Third-Party and Supply Chain Attacks

Financial ecosystems are deeply integrated with third-party vendors, from payment processors and KYC providers to cloud-hosted platforms. According to a 2025 report by SecurityScorecard, 41.8% of breaches in leading fintech companies were directly linked to third-party vendors.

4. Credential Abuse and Phishing

Phishing continues to be a common first step in attacks on banks and financial services. Credential theft through deceptive login pages, business email compromise (BEC), and insider impersonation remains prevalent. Several high-profile breaches in 2024 began with phishing, which was then used to compromise administrator credentials or pivot into internal systems.

Reports from the American Bankers Association indicate that many financial ransomware incidents began with successful phishing campaigns targeting front-office or IT staff, despite multi-factor authentication (MFA) being enabled in some cases.

5. Application Layer DDoS and Targeted Disruption

Low-and-slow application-layer DDoS attacks have become common against online banking interfaces and trading platforms, especially around sensitive periods such as IPOs or major disclosures. These disruptive attacks intend to degrade service without triggering volumetric defense thresholds, often to obscure or distract from concurrent intrusion efforts.

Why These Threats Demand Integrated VAPT

These techniques are rarely used in isolation. For example:

• A phishing campaign may lead to credential theft.
• That initial access may then be used forvulnerability exploitation on exposed systems.
• Attackers can move laterally, exfiltrating data or disrupting services via ransomware or DDoS.

This tiered attack model demands continuous VAPT that reflects real-world adversary tactics and organizational exposure. Only then can institutions maintain visibility over changing risk surfaces and prevent piecemeal defenses.

Well-managed VAPT programs offer audit-ready documentation, demonstrating remediation efforts and compliance, helping firms avoid regulatory penalties, legal risk, reputation damage, and potential operational constraints.

Best Practices for VAPT in Financial Services

1. Run VAPT Quarterly or After Major Changes

Frequency is not one-size-fits-all. While regulatory baselines like PCI DSS require penetration testing at least annually and after any significant change, this is the bare minimum. High-risk institutions, especially those with active development pipelines or public-facing platforms, should conduct VAPT more frequently.

Recommended practice:

• Vulnerability scans: Run monthly or continuously to catch known CVEs and configuration vulnerabilities early.
• Manual Penetration testing: Perform at least quarterly for critical systems or immediately after major changes such as:
  • Application code updates or feature rollouts
  • Cloud migration or architectural shifts
  • Integration of new third-party services (e.g., payment processors, fintech APIs)
  • Incident response or detected breach attempts

DORA (Digital Operational Resilience Act) mandates Threat-Led Penetration Testing (TLPT) every three years for critical EU financial entities, which must simulate realistic threat scenarios. Similarly, the FFIEC Cybersecurity Assessment Tool and RBI cybersecurity circulars require testing to be aligned with business risk and change events.

2. Always Tailor the Scope

A poorly scoped VAPT can miss critical exposure points or waste resources testing irrelevant systems. Scope should be risk-driven and business-aligned, not generic.

What to include:

• Crown-jewel assets: Core banking systems, internet banking portals, mobile banking apps, and customer KYC platforms.
• APIs: Especially those tied to payments, account aggregation, or open banking (PSD2-compliant or otherwise).
• Third-party integrations: Payment gateways, CRM tools, cloud services, or any vendor-managed interfaces that access sensitive data.
• Mobile applications: Both iOS and Android versions, including API calls, local data storage, and authentication flows.

Also define out-of-scope assets to avoid unnecessary testing or conflict during execution. Use asset classification and risk registers to guide prioritization.

3. Prioritize Manual Pen Testing for Business Logic Risks

Automated scanning plays a critical role in identifying known vulnerabilities such as outdated components, misconfigurations, and OWASP Top 10 vulnerabilities at scale. However, certain complex attack paths, especially those tied to business workflows, require manual insight.

Why manual pen testing is essential alongside automation:

• Business logic vulnerabilities exploit how an application is intended to behave, not just how it is coded. These can include:
  • Unauthorized fund transfers by altering request parameters
  • Circumventing authentication via forced browsing or step-skipping
  • Exploiting missing checks in multi-step transactions or approval flows
• These vulnerabilities are contextual; they depend on understanding real-world use cases, roles, and transaction flows, which automated tools alone cannot fully interpret.

While automation ensures broad and continuous coverage, manual pen testing by security experts is necessary to uncover deeper risks that could lead to financial fraud or privilege escalation.

4. Review Remediation Progress and Retest

Initial testing is only the beginning. A vulnerability that is marked as “resolved” in a tracker does not prove anything unless it is formally retested and validated.

Key practices:

• Track remediation timelines
• Retest fixes in the same environment where they were deployed, using the same inputs and payloads to confirm effectiveness
• Check for regression or newly introduced vulnerabilities post-remediation, which are common in rushed fixes

Many compliance frameworks require evidence of revalidation. For example, PCI DSS requires proof that vulnerabilities have been remediated and retested before marking them closed.

5. Secure Testing Environments

Testing against production systems in financial services requires tight control. A poorly planned test can disrupt live transactions, affect availability, or even trigger fraud alerts.

Best practices:

• Use mirrored staging environments possible, cloned from production but isolated, with full feature parity for realistic testing
• If production testing is necessary:
  • Establish documented rules of engagement approved by security and operations teams
  • Schedule tests during low-traffic periods
  • Limit tests that alter data (e.g., transactional abuse tests) unless pre-approved and controlled
  • Monitor logs, performance metrics, and anomaly alerts in real time

All production testing should be preceded by a risk impact assessment, and test data should be anonymized or synthetic unless explicitly permitted.

What to Look for in a VAPT Provider for Financial Services

In the highly regulated and risk-sensitive world of financial services, choosing the right VAPT provider is critical. Here are the key factors to consider:

1. Deep and Broad Coverage Across Financial Attack Surfaces

Financial services depend on complex digital environments, web apps, APIs, mobile platforms, cloud workloads, and third-party integrations. A provider must be capable of testing these layers thoroughly.

What to look for:

• Authenticated scanning for logged-in and role-specific user flows
• Business logic testing for transactional vulnerabilities and misuse scenarios
• Mobile app assessments and third-party exposure evaluations

Platforms that combine automated and manual testing are more effective at catching deep, business-impacting vulnerabilities. Indusface WAS offers both: automated scanning to cover known CVEs and misconfigurations at scale, and expert-driven manual penetration testing to uncover complex vulnerabilities like business logic vulnerabilities and chained exploits. It also supports guided authenticated scan to test beyond login screen ensuring critical vulnerabilities are not missed.

2. Zero False Positives with Human Validation

In the financial sector, every alert carries weight, a false positive is not just a minor inconvenience; it can waste hours of your security team’s time, delay incident response, and cause unnecessary panic during audits.

A good VAPT provider combines automation with expert manual testing to:

• Validate each finding, ensuring it is not just a noise from an automated tool.
• Prioritize real threats that impact your assets, customers, or compliance posture.
• Provide contextual insights, explaining the business impact and how to fix it.

Indusface WAS eliminates this problem by combining the power of AI-driven scanning with expert human validation, a crucial need for financial institutions bound by stringent regulations like PCI DSS, SOX compliance and region specific guidelines such as RBI’s VAPT directives.

3. Risk-Based, Business-Aware Reporting

Not every vulnerability has the same impact. A useful report highlights what could compromise data, funds, or critical operations, not just surface-level CVSS scores.

Look for:

• Risk prioritization that factors in exploitability, asset sensitivity, and business value
• Reports tailored for different audiences (security teams, auditors, developers)
• Clear remediation guidance mapped to real-world impact

Some providers go beyond generic scoring by using context-aware engines. For example, AcuRisQ by Indusface combines technical severity with business context, like data exposure, asset criticality, and likelihood of exploitation, so security teams can focus on what truly matters.

Risk-focused reporting helps financial institutions avoid chasing low-priority vulnerabilities while ensuring the most dangerous vulnerabilities are resolved first.

4. Regulatory Mapping and Compliance Readiness

Your VAPT provider should reduce audit stress, not create it. They must support compliance with financial-sector regulations like PCI DSS, ISO 27001, SOC 2, FFIEC, DORA, and the RBI Cybersecurity Framework.

What to expect:

• Audit-ready reports mapped to required controls
• Support for revalidation and retesting after remediation
• Capability to simulate real-world scenarios (e.g., TLPT under DORA)

With Indusface WAS, financial institutions go a step further beyond reporting to closing the loop:

• Autonomous patching of open vulnerabilities via SwyftComply
• Immediate risk reduction without waiting for code-level fixes
• Zero-vulnerability reports backed by continuous scanning and human validation, ideal for audits and board-level reporting.

This not only supports ongoing compliance readiness but also enables you to present a clean security posture to auditors, regulators, and internal stakeholders on demand.

5. Safe Testing for Production Environments

Live testing in financial services requires careful planning and coordination to avoid disruptions. Your provider should operate within strict boundaries and offer transparent procedures.

Check for:

• Clearly defined rules of engagement
• Support for test windows and impact-sensitive planning
• Real-time communication with internal stakeholders

With Indusface WAS Managed Support, you are never left navigating this alone. The SoC as a service team

• Work closely with your teams to coordinate test timing and scope
• Ensure zero disruption by following safe testing protocols
• Continuously monitor and respond during testing to mitigate any unforeseen vulnerabilities.

This ensures that your production systems remain stable while still identifying and fixing real security risks.

6. Certified and Sector-Aware Security Experts

Testing financial systems is not just about tools; it requires skilled professionals who understand how transactional logic works and how attackers think.

Look for:

• Certifications like OSCP, CEH, CISA, or CISSP
• Experience in banking, insurance, or fintech platforms
• Ability to uncover business logic vulnerabilities and exploit chains

This kind of expertise is critical when evaluating risks that automation cannot detect, like chained vulnerabilities or privilege escalation.

7. Continuous Testing and DevSecOps Integration

Security is not a one-time activity; it must be embedded continuously throughout the software development lifecycle. A strong VAPT provider should support DevSecOps by integrating security testing into your CI/CD pipelines and remediation workflows without slowing down delivery.

What to look for:

• Continuous scanning and scheduled assessments
• CI/CD integration and ticketing system compatibility
• Support for remediation tracking, retesting, and audit logs

Indusface WAS integrates directly into your CI/CD pipelines, enabling automated security scans during the build or deployment phases. This means:

• Early Detection: Critical vulnerabilities are flagged before code is pushed to production.
• Automated Gatekeeping: Builds can be blocked automatically if high-risk issues are found.
• Faster Remediation: Detected issues are sent to your ticketing system for immediate action.
• Audit-Friendly: All activities, scan results, and fixes are logged for compliance and audit readiness.

8. Scalability and Long-Term Fit

As your infrastructure grows, so should your provider’s capabilities. VAPT tools must scale across assets, regions, and architectures without added complexity.

Assess:

• Multi-cloud and hybrid environment support
• Containerized and microservice application coverage
• Easy onboarding and flexible licensing options

Choose a provider that evolves with your security maturity, so you are not forced into costly migrations or limited by tool capabilities later.

Indusface VAPT for Financial Services

Indusface offers a purpose-built VAPT solution for financial institutions through its Web Application Scanning (WAS) platform. It combines automated vulnerability scanning with expert-driven manual penetration testing and continuous revalidation. The scanner identifies known vulnerabilities and misconfigurations across websites, APIs, and mobile apps, helping security teams maintain visibility across critical assets.

Manual testing by certified experts goes beyond surface-level vulnerabilities to uncover deeper risks such as business logic vulnerabilities, broken access controls, and chained exploits that automation alone cannot detect. Every finding is validated for exploitability, eliminating false positives and allowing faster more focused remediation.

To accelerate post-discovery response, SwyftComply provides instant, autonomous remediation, allowing security teams to reduce exposure immediately. Detailed reports are generated with information such as URL, severity, and vulnerability category, supporting compliance with PCI DSS, ISO 27001, FFIEC, and DORA.

From discovery to protection and reporting, Indusface provides a complete VAPT workflow tailored for regulated financial environments, without slowing innovation.

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