Ask HN: A major USA bank is storing passwords in cleartext – what to do?
As someone who works in finance&#x2F;banking, I can assure you that this is not uncommon. Almost everyone is engaging in not-so-best practices with password storage if they are using any 3rd party vendors. Only the institutions with the resources to rebuild in-house systems with modern security standards are the exception to this rule. There are only a handful of these. Ultimately, it&#x27;s not some malicious intent or incompetence, but simply the acknowledgement that the legacy systems will not enjoy PBKDF hash+salt+iterations columns being added 30 years after the fact.<p>The risk analysis and mitigation discussion for these institutions goes something like this:<p>1) We cant have good password storage so we will require a 2nd factor and attempt to ensure these systems reside in our most secure network.<p>2) There is nothing we can do, so we will simply rely on the fact that if someone logs into an account illegally, we send in the men with guns. For some strange reason when a bank calls the FBI things move with a high level of expediency.<p>There is much more to this than just the technical aspect of &quot;oh my goodness why aren&#x27;t you hashing your passwords&quot;. How much ripping would HN impose on one of these institutions if they attempted a 100% best practices secure password upgrade and then subsequently had a complete IT disaster unfold (I can certainly link articles). For many banks and other financial institutions, going down for even 1 hour is a complete catastrophe. If people can&#x27;t get their money out right away, they are leaving for the competition and you will likely get dinged by regulators. Bad people will continue to do bad things until the end of time. Killing your business to handle every edge case, even if it seems obvious, is not a good path to go down.<p>I would also consider this: These banks&#x27; IT systems are storing things that many of us would argue are much more valuable than your passwords. A bank&#x27;s core system also represents the actual monetary value of every customer&#x27;s account. We are talking about password security in a system domain where there are arguably far more valuable assets to secure. These assets are already implicitly protected by a massive apparatus extending as far as Ohio Class nuclear submarines patrolling the Pacific ocean.