Page 30 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

and alter call routing – coupled with intercepting a customer’s SMSs – means that the OTP may never reach
the target customer, or may be intercepted en route.
3
4
Availability
An adversary capable of mounting a rogue base station attack can choose not to relay information to the
financial provider, thus denying the ability of a transaction to go through. This threat exists to both SMS-based
mobile money systems and newer smartphone-based systems where SSL over IP is used. While in this latter
case the fidelity of the data is not at risk, the availability of the back-end service can be in question.

Privacy

An adversary who has compromised communication at the base station has significant capabilities to breach
the privacy of the client, by gaining access to sensitive financial and potentially personal information, and with
the ability to profile all network activity performed by the client.

Recommendations for mitigation
R10 – Discontinue the use of A5/0, A5/1, and A5/2 GSM encryption ciphers. Closely monitor results from
the security and cryptographic community regarding the feasibility and ease of compromising A5/3 and A5/4
and begin considering stronger ciphers. Have a deployment strategy ready for these newer ciphers.

R11 – Consider transitioning away from mobile applications that leverage SMS and USSD in favour of
solutions that use strong public key cryptography and end-to-end security. Such solutions could include the
use of specifically smartphone-based solutions that use OpenSSL and up-to-date versions of TLS. The use of
SIM App Toolkit can also provide the means for supporting cryptography. While existing architectures may be
in place for the near-term future and it will likely take years for smartphones to become widespread enough
to supplant feature phones, hence decommissioning SMS and USSD-based DFS services and transitioning
high-value and high-volume accounts (e.g., business and merchants) to smartphones that support end-to-
end security can protect those accounts while ensuring that risk mitigation strategies are in place for feature
phones.
Because of the SS7 vulnerabilities described above, the US standards body, National Institutes of Standards
& Technology (NIST), has recommended that SMS no longer be used for any authentication purposes for
financial transactions. 5

3 Using the ‘processUnstructuredSS’ SS7 message, the attacker is able to send USSD codes on behalf of the customer, possibly
authorizing a credit or money transfer transaction from the target. Engel, T. (2014) CAMEL. In “SS7: Locate, Track & Manipulate”,

.
available athttp:// berlin. ccc. de/ ~tobias/ 31c3- ss7- locate- track- manipulate. pdf While this interception is technically possible and
has been described, it should be noted that interception of the SUTLP may be difficult to achieve, since the USSD session that
elicits that response is from a live and active handset, and secured by the MNO's PIN. To re-route the SMS destination from the
known location of the handset to the hacker would have to take place almost instantaneously, and is likely to throw exception
warnings at the MNO.
4 See, for example, the massive breach of the supposedly secure instant messaging application, Telegram, by hackers. Vulnerability
in Telegram and other apps using OTP via SMS lies in their use of OTPs via cleartext SMS text messages to activate new devices.
When users want to log on to Telegram from a new phone, the company sends them authorization codes via SMS, which can be
intercepted. With these codes, hackers can add new devices to a person's account, enabling them to read chat histories as well

as new messages. See Reuters (2016) Exclusive: Hackers accessed Telegram messaging accounts in Iran, available athttp:// www.
reuters. com/ article/ us- iran- cyber- telegram- exclusive- idUSKCN10D1AM
5 SMS as an authentication mechanism has been deemed ‘usable, but regarded as obsolete and best avoided’ by the US National
Institutes of Standards & Technology in its recent Digital Authentication Guideline on SMS verification mechanisms. See NIST
(2016) DRAFT NIST Special Publication 800-63B Digital Authentication Guideline, available at https:// pages. nist. gov/ 800- 63- 3/
sp800- 63b. html.

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