Why Financial Institutions Must Double Down on Open Source Investments

Following the trio of the Log4J vulnerability and the more recent compromise of two open source libraries in the NPM ecosystem and one in Spring Core, supply chain security is weighing heavily on cyber defenders' minds. While the financial services sector has hardened its cyber defenses compared with other industries and become one of the earliest adopters of zero-trust security, institutions must continue to embrace open source technology while actively engaging in risk mitigation.

With so many foundational components of the global tech stack originating from open source code repositories like GitHub, recent exploits have heightened worries that this open ecosystem is inherently vulnerable to attack. This is especially true given the finance industry's finance industry's embrace of open source, as shown by Goldman Sachs contributing source code of several of its data modules as open source in 2020.

Keeping Open Source Environments Protected

First off, financial institutions must assume a more active role in the funding of open source foundations and direct-to-maintainer grants to help limit exposures from critical code dependencies, as illustrated by the Log4Shell debacle. To this end, public-private sector partnerships will be vital for financial institutions looking to harden their open source security postures. Confronting the inherent DevSecOps of the open source ecosystem requires a financial and strategic commitment from institutions willing to support the whole spectrum of open source maintainers — and not just the Apache Software Foundations of this world. Projects like the OpenSSF Alpha-Omega initiative are a great example of this approach.

Financial institutions also need to adopt a more robust software bill of materials (SBOMs), a key point highlighted in President Biden’s executive order from last June. Modern SBOMs deploy machine-readable processing, a technology that enables systems to ingest incoming structured report data, to autonomously analyze the state of SBOM readiness by organizations around the world. SBOMs can thus help financial institutions rapidly identify patterns across their industry and across borders, helping them spot critical risk issues before they metastasize into larger problems.

A table-stakes strategy for financial institutions to mitigate open source risks on the consumption side include the implementation of stronger internal license and IP controls and tools to track and monitor inbound open source projects. More granular strategic solutions start with financial institutions taking time to understand the defenders that are focused on securing the open source realm. Organizations like Mend, Sonatype, and Synk are key players in this world.

The broader sustainability of the open source ecosystem is another reason for financial institutions to assume a more hands-on role in the development of code repositories and other active-source artifacts. Institutions should consider offering secure coding training as part of their onboarding, something too often overlooked in academic curricula.

Encouraging in-house developers to contribute "sweat equity" to the ecosystem will increase the number of eyes on open source artifacts, thus enhancing the odds that financial institutions will be able to spot code vulnerabilities before they threaten a SolarWinds type of breach. This approach will effectively reduce the probability and blast radius of future vulnerabilities.

Benefits of Open Source Outweigh the Risks

Despite recent, worrisome supply chain attacks, financial institutions should not be deterred by these challenges. The global financial industry is now very seriously democratizing software through open source, not only as a cost reduction but as a powerful collaboration model that goes beyond code to be used to address challenges like data standardization and industrywide interoperable workflows. Open source is here to stay, and therefore it is no longer optional — it's imperative that CIOs have a mature, open source engagement strategy, across consumption, contribution, and funding as a pillar of their digital transformation endeavors.

Institutions are doing more than just implementing code that another developer has updated. Financial organizations should look to invest internal developer resources to actively contribute to code repositories. Developers should be contributing code not just in their spare time, but more appropriately, while they're on the job within the expected scope of their organizational roles.

By taking a proprietary stake in the open-innovation ecosystem, financial institutions can better mitigate vulnerabilities and exposures emanating from their tech stacks. This type of risk management also requires the articulation of companywide policies, learning, and collaboration resources throughout the firm. Naturally, financial institutions need to delegate and establish leadership roles to oversee the effort.

Whether through open source foundations or direct monetary or sweat-equity contributions to projects, financial institutions must realize the importance of professional software supply chain management. They should also understand the roles that consumers must play in securing the open source IT stack, which underpins the modern digital economy.

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Why Financial Institutions Must Double Down on Open Source Investments

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