The Hidden Risks of Legacy Divest Applications Running on the Internet

…and How Codesealer Provides a Lifeline

Executive summary

Legacy applications, despite being critical to many organizations, pose significant risks due to outdated technology, high maintenance costs, and security vulnerabilities. High-profile breaches, such as those at Equifax and Marriott, highlight the consequences that can result from relying on unsupported legacy systems. Securing these applications is more urgent than ever. Codesealer offers a proactive solution (no code changes required), safeguarding legacy systems while maintaining their operational efficiency and compliance. This allows organizations to focus on strategic growth without compromising security, ensuring that legacy software remains protected against emerging threats until a full modernization is possible.

What are legacy appplications?

Legacy applications are older software systems or applications that were developed with technologies, frameworks, or platforms that are now outdated or no longer supported. Many banks, financial institutions, and governmental systems continue to rely on legacy systems. Businesses continually evaluate their application portfolios to determine which applications to invest in, maintain, or divest. These applications often remain critical to a company’s operations, but over time they can become problematic. Legacy divest applications running on the Internet pose significant risks that are often underestimated. First, legacy applications can hold companies back from keeping up with the industry’s speed of development. Moreover, the rising technical debt of legacy software makes it difficult and risky to change, further increasing maintenance costs and bringing more security issues.

Understanding Application Portfolio Types: Invest, Maintain, and Divest

Before diving into the risks associated with legacy divest applications, it’s essential to understand the categorization of application portfolios:

1. Invest: Applications in this category are crucial for future growth. These are typically innovative, customer-facing, or revenue-generating applications. Organizations allocate significant resources to enhance and scale these applications.
2. Maintain: These applications are stable, providing essential functions that support day-to-day operations. While they may not offer direct competitive advantages, they are critical for business continuity. Maintenance involves regular updates, security patches, and minor enhancements.
3. Divest: Applications in this group are outdated or redundant, offering minimal strategic value. These are often legacy systems that have been replaced or made obsolete by newer technologies. Organizations plan to phase out these applications, but the transition can be slow due to dependencies, data migration challenges, or cost constraints.

The statistics behind legacy divest applications are surprising. According to a Reuters study, 43% of banks still use COBOL—one of the oldest programming languages—in their banking systems. More than half of the banking executives interviewed for the World Retail Banking Report 2022 stated that they are very concerned about their current dependency on legacy technology and rising technology debt. Unfortunately, there is no simple migration solution. Many of these systems require experts who can modernize the current legacy software without interrupting business operations. Moreover, such migration projects are often time and resource consuming. Since most C-level decision-makers in banks prefer short-term outcomes, achieving modernization of legacy systems becomes quite difficult.

However, with the recent surge of FinTech companies, clients expect more from their banking experience. In fact, 51% of banking executives interviewed for the World Retail Banking Report 2022 confirmed that legacy technology and the resulting technology debt are standing in the way of their bank’s success. New agile FinTech companies are usually more innovative, faster, and considerably more effective at offering a new level of digital services, challenging the revenue and relevancy of many traditional providers.

Risks of running a legacy application

Legacy divest applications, by their very nature, are prone to several risks:

Compatibility Issues

• Outdated Technology: Legacy applications might not be compatible with newer systems, operating systems, or software updates. As the technology landscape evolves, maintaining and integrating these old systems with modern ones becomes increasingly difficult.
• Hardware Dependencies: They may rely on outdated hardware, which can be expensive or impossible to maintain as manufacturers stop producing parts.

Security Risks

• Lack of Updates: Legacy applications may no longer receive security patches, making them vulnerable to cyberattacks. Hackers often target these systems because they know the software is outdated and less secure.
• Compliance Issues: Outdated software may not comply with current regulatory standards, exposing companies to legal risks and penalties.

High Maintenance Costs

• Specialized Skills: Maintaining legacy systems often requires specialized knowledge of outdated programming languages or systems, making it hard to find qualified personnel. The cost of hiring or training staff to manage these systems can be high. Spending on outdated payment systems is expected to climb to cost banks and financial institutions $57.1 billion in 2028.
• Expensive Support: If the vendor no longer supports the application, the company may need to pay for costly custom support or develop internal solutions.

Operational Inefficiency

• Slow Performance: Legacy applications may not perform as efficiently as modern alternatives, leading to slower processes and reduced productivity.
• Inflexibility: These systems may not be easily adaptable to new business needs or processes, limiting the company’s ability to innovate or respond quickly to market changes.

Integration Challenges

• Incompatibility with New Systems: Integrating legacy applications with modern software systems, cloud services, or data platforms can be difficult or impossible, leading to fragmented workflows and data silos.
• Complex Workarounds: Often, companies must create complex and costly workarounds to bridge the gap between legacy and modern systems, which can lead to increased complexity and potential points of failure.

Data Silos

• Fragmented Data: Legacy applications may not easily share data with other systems, leading to data silos where information is trapped in isolated systems. This makes data analysis and decision-making more difficult.
• Data Migration Challenges: Moving data from a legacy system to a new platform can be complex, risky, and costly.

Real world attacks

Equifax Data Breach

Equifax, one of the largest credit reporting agencies, suffered a massive data breach that exposed the personal information of over 147 million people. The breach was due to a vulnerability in Apache Struts, an open-source web application framework. Although a patch for the vulnerability was available months before the attack, Equifax had not applied it, leaving the system exposed. The breach led to significant financial losses, reputational damage, and regulatory scrutiny. Equifax eventually settled for up to $700 million in fines and compensation.

WannaCry Ransomware Attack

WannaCry was a global ransomware attack that affected hundreds of thousands of computers across 150 countries. It encrypted data and demanded ransom payments in Bitcoin. The attack exploited a vulnerability in older versions of Microsoft Windows (SMB protocol). Microsoft had released a patch before the attack, but many organizations had not updated their systems, leaving them vulnerable. The attack affected numerous organizations, including the UK’s National Health Service (NHS), which saw widespread disruption. The total damage from WannaCry was estimated to be in the billions of dollars.

Marriott Data Breach

Marriott International suffered a data breach that exposed the personal information of up to 500 million guests. The breach was traced back to a vulnerability in Starwood Hotels’ legacy reservation system, which Marriott had acquired. The attackers had been in the system for four years before being discovered. The breach resulted in regulatory fines, including a £18.4 million fine from the UK’s Information Commissioner’s Office (ICO), and caused significant reputational damage.

How to prevent this type of attack

While legacy applications may still serve critical business functions, their outdated nature brings a host of challenges, including security risks, high maintenance costs, operational inefficiencies, and barriers to innovation. Companies often face tough decisions about whether to maintain, modernize, or replace these systems to stay competitive and secure in the long term. However, with Codesealer, businesses can effectively mitigate these risks, ensuring that even their outdated systems remain secure, compliant, and efficient until they’re ready to be retired.

Codesealer’s advanced features allow organizations to maintain the integrity and performance of legacy applications with no code changes, enabling them to focus on strategic priorities without compromising security. In a world where cyber threats are constantly evolving, it’s crucial to take proactive steps to secure every aspect of your IT environment, including legacy systems. Codesealer provides the peace of mind needed to navigate the complex landscape of digital transformation while safeguarding your legacy investments.

Ready to fortify your legacy software against cyber attacks? Contact us today to learn how Codesealer can provide the proactive protection your business needs. Our cutting-edge technology ensures that your systems remain secure, shielding your business from the ever-evolving threat landscape.