Logic flaws are the indifferences arising from the structural incapacities of the software or organization. Let us understand this better by looking at an example of an apartment located in a hilly area. If the beams and piers used in the foundation of the building are incapable, it would threaten the entire building structure.
Failure could be due to the short future insight, flawed reasoning, cheap materials, and integration incapacities. Now, you can surely relate it to the structure of a business model. How do the flaws in its core diminish it? Let’s look at some of the major business logic flaws.
Business logic flaws are considered vulnerabilities in the decision-making processes within software applications, not dealing with the configuration and code directly. This isn’t to say that logic flaws can’t create technical errors.
Business Logic Flaws
Solving business logic flaws requires an understanding of the business and manual testing. Business logic plays an immense role in development and stability; it’s possible to implement a system successfully.
Before implementing any software, it’s crucial to research its business logic thoroughly. We can use algorithms and workflows to ensure that the software’s logic is sound and secure. This caution and preparation are key to avoiding business logic flaws, highlighting the importance of thorough research and testing in software development.
We’re all familiar with the phrase ‘appearances are deceptive,’ and it is especially convenient when referring to logical flaws.
No matter how much a business invests in introducing functionalities in their software, if those functionalities do not adhere to strict policies and monitoring, it’s all going to waste.
Logic is key to the establishment, and it demands time and effective team management for its success. Problems like logical flaws arise only when the protocols are not followed, and the logic behind them needs to be revised for future needs.
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Schedule a free consultation with Iterators today. We’d be happy to help you find the right software solution to help your company.
How do Business Logic Flaws Arise
Business logic flaws occur when the logic behind the business has gaps in it. This means the system has not covered all bases, and if it has, all scenarios have not been kept in mind during the design and implementation phases.
Let’s take an online ticketing system as an example. The ticketing system offers a 30% discount if the number of tickets is more than 10,000. However, due to a business logic flaw, the system continues to give out the discount regardless of the number of tickets left.
This leads to confused, frustrated buyers and lost revenue.
Business logic flaws can be devastating but occur less in software that ensures quality. You can read our software quality assurance article for more insight.
Let’s look at the most major ways that logic flaws occur:
Occurrence of Logic Flaws
1. Authentication Issues
Users must be authenticated before they gain access to the system. However, a flaw in the system can lead to a breach in authentication systems as the attacker gains unauthorized access to restricted areas.
This poses an indefinite number of violations due to the lack of proper monitoring at the time of logging in. The authorization isn’t limited to just the identification of the user and can extend to how the user is allowed to rotate within the system.
2. Flawed behavior
Okay, we’re through authentication. How can logic flaws occur now? A user can be exposed to business logic flaws throughout the interaction.
Business logic flaws can make a system vulnerable. Flaws in business logic create gaps that can be exploited by users, attackers, and the system itself. When the system fails to act appropriately, it is based on flawed assumptions about user behavior. This can lead to users either losing or gaining benefits.
Business logic vulnerabilities are flaws in the design and implementation of an application that allow an attacker to eliminate unintended behavior, such as, when a user gains unwarranted access to the system’s facilities, the logic must prevent that user from exploiting its services.
This is where business logic vulnerabilities occur. Attackers may slither in after logging in and use facilities they’re not entitled to. This is why it’s so important for developers to maintain strict protocols even after the initial security policies have been implemented.
3. Price Manipulation
Attackers can manipulate the price of products or services by tampering with client-side data, potentially causing financial losses for both businesses, and Account Enumeration vulnerabilities allow attackers to identify valid user accounts by exploiting differences in error messages or response times. This information can be leveraged for further attacks, such as brute force or phishing campaigns.
4. Business Workflow
Business workflows can be disturbed by unnecessary steps. For example, an issue in the inventory logic can lead to excessive stockouts.
Inaccurate data handling can lead to miscalculations in financial reports, orphaned data or duplicate data, and incorrect application of discounts.
Process failures and delayed transactions can cause entire processes to fail triggering system outages and customer dissatisfaction.
5. Inadequate Testing
It’s no secret that if an operation is not methodically tested, it is bound to fall apart. Inadequate testing occurs when all scenarios and user identities are not studied.
Online banking is susceptible to this particular problem. For example, unexpected fees and charges can be applied to bank accounts due to inadequate testing in the system. The occurrence of a bug when applying new features, or in maintaining the previous can cause such issues.
The testing phase also comprises the constant need for indefinite testing. However, most developers need to include this part, which generates major concerns.
Potential Consequences of Business Logic Flaws
Business logic flaws are no ‘minute’ problems and can have detrimental consequences on various, if not every, aspects of a business.
The critical consequences can be noted below and serve as a guide.
Financial Risks
Financial risks are harbored through fraudulent transactions and incorrect billings.
Revenue streams are affected when incorrect billings take place, as the user may gain or lose benefits when the charges aren’t accounted for correctly.
For example, if a discount code is set to work once, then the system is supposed to decline any advances on reuse. However, due to a flaw in the discount application system, a customer may use the discount code multiple times, violating it.
Financial losses pose a large threat to the company due to operational costs. These costs increase with the growing inefficiencies in handling data.
Significant costs can be incurred if we take into account customer complaints or legal disputes.
Legal Disputes and Image Degradation
Serious business logic flaws can lead to hefty legal disputes regarding their effects on a customer or regulatory authorities. Settlements and litigation costs are a price to pay as well (no pun intended).
Public disclosure of incidents such as these can further complicate the business’s image in society, market value, and stock prices.
Even a top ride-hailing app like Uber faced image degradation in its ‘price surge dilemma’, raising prices up to four times during the 2014 Sydney ‘cafe siege’. This occurred due to faults in its price surge algorithm.
Competitors may undermine the organization by exploiting its business logic flaws, which can negatively affect the business’s reputation.
User Data and Privacy Compromise
Several scenarios account for data and privacy compromises, and I don’t have to mention the problem that produces them now (the ‘BLV’ word). So, let’s talk about them.
Improper access controls
Unauthorized users can use the defects in access control logic to gain sensitive user data.
For example, if permissions are incorrectly implemented, the attacker can modify or simply view another user’s private data. 64% of US citizens have been impacted by at least one of the different types of data theft.
Cross-site scripting (XSS) and Cross-site forgery (CSRF)
What if I told you to ask your parents for consent to attend a ball? Except, when we reach the destination, it’s a sleepover? (I’d be pretty mad). Cross-site scripting and Cross-site forgery are quite like that.
Let’s understand this better with a case study.
CASE STUDY:
Concern: An e-commerce platform, Destiny, faced a CSRF issue where users could be tricked into altering their account details or placing orders through forged requests. The business logic failed, as it did not have safeguards against these unauthorized requests.
Impact: The company would face increasing security issues, like attacker interference, monetary losses, and probable legal issues.
Unauthorized executions are made on behalf of authenticated users, compromising user privacy. CSRF attacks smoothly construct traps to trick users into unintentionally exposing private information through unwarranted actions.
Data retention issues
Flaws in Data Retention policies and algorithms can result in deletion or improper retention of user data. Data retention was a contributing factor to the $150 million fine Twitter faced, for misusing user data. Unauthorized access escalates when outdated data is not deleted promptly, and revisions to the data need to be made.
For example, a company that retains a user’s private information without clearly stating it will result in a data breach in the coming years, which would instigate customer dissatisfaction and regulatory fines.
Flaws in Session Management
Session hijacking is a common problem faced by businesses. Faults in session management logic can result in sensitive data leakage of authorized users and the abuse of the facility.
A video-streaming company, for example, uses flawed session management logic. The service is supposed to allow users to stream based on their subscription plans, but the session management logic has a flaw regarding session expiry, leading to revenue loss and customer service strain.
Compliance Issues
Business logic flaws can hinder contractual obligations and stimulate regulatory non-compliance with data protection laws, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA).
This creates further complications for the organization. If the business doesn’t correspond to the industry-specific requirements, regulatory sanctions and loss of certifications may be faced.
Mitigation of Business Logic Flaws
To mitigate business logic flaws, a combination of proactive measures as well as vigilance is required.
This isn’t a one-and-done occurrence, and true mitigation is achieved only through the continuous revision of the business model and software.
The developer must eye these key strategies to ensure the elimination of business logic flaws and their exhibition:
1. A Solid System Development Life Cycle (SDLC)
Requirements analysis: construct a strong and researched analysis of the requirements needed for the business software.
Remember the rapidly evolving technological standards and the consistently used fundamental properties offered in the market.
2. Secure design
Offer a substantial system that identifies vulnerabilities early on in the development process. Incorporate the best principles and practices in the design phase.
3. Code revision
Code revisions make it easier to identify flaws. This time-consuming process focuses on logical errors and security vulnerabilities.
4. Testing
This essential step is key to the whole SDLC system. With proper and recurrent testing, even the most solid systems can recover.
Comprehensive testing strategies, such as regression and security testing, are conducted during this phase.
5. Source Code Audit
Source Code Audit identifies weaknesses in the codebases by conducting source code audits. It ensures the security and reliability of software applications.
Source code audits are necessary for compliance surety as auditors are to examine code quality by assessing anti-patterns.
Contribution of User Input Validation
User input validation is necessary to mitigate some business logic flaws.
If you could stop a flaw from occurring, wouldn’t you? And the best part is…you can! This is by ensuring the data you input is precise, safe, and consistent with the expected formats.
This can help combat the common attacks of SQL injection and cross-site scripting (XSS).
What are the best practices for incorporating security measures into the software development process to minimize business logic flaws?
Some practices that can relate to minimizing business logic flaws by incorporating security measures include:
Threat modeling: developers can help identify security flaws by threat modeling. This works by playing out hypothetical instances of how a threat could pose itself by studying system diagrams. High-risk areas should be prioritized.
Early involvement: Involve stakeholders and security experts during the requirement and design phase to filter out flaws in the initial stages. This saves valuable time and the painstaking realization that you would have to redo an entire segment entirely.
Security Testing: Incorporating security testing throughout the development is essential.
It’s also best to run through static code analysis, dynamic application security testing (DAST), and penetration testing according to these guidelines.
Apart from these, security awareness, training, incident response, and monitoring play a great part in establishing less flawed and stable software.
Business Logic Flaws in the Real World
1. Tesla’s Cybertruck Ruckus
Tesla, the worldwide phenomenon, launched their first delivery of the Cybertruck back in November of 2023. The idea, marketed in a ‘dystopian’ setting, appealed to millions. Features of the pickup truck included ‘armor glass’ unbreakable windows, and a stainless-steel body, which quickly received skepticism from the public and designers alike.
Tesla was under fire when a design report leak hit the media demonstrating design flaws. The previously promised unbreakable windows smashed after two hits. This design flaw remains unaddressed, with reports listing the Cybertruck as ‘not bulletproof’. This is because upon successive shots, especially in the same area, the pickup truck’s windows collapsed.
The report further showed issues with the cars handling ability including ‘structural shake’, and excessive mid-speed abruptness. The braking department wasn’t clear either, and actually showed some of the worst ratings. Cybertruck continues to defame its existence by not addressing customer concerns.
‘It could amputate your fingers’, ‘not made to deal with snow’, ‘accelerator pedal stuck’, ‘faulty windshield wipers,’ all these reports of its incapacity are constantly rolling out.
Experts noted that the stiff stainless-steel exterior and angular design could potentially harm other vehicles on the road and passersby.
Business logic flaws like Tesla’s invites criticism, concern, and legal battles. However, most of these issues can be resolved if public sentiment is considered, and a quick response rate.
2. London Stock Exchange (2007)
The LSE is one of the largest exchanges in the world. On the 16th of August, Friday, The London Stock Exchange (LSE) faced an issue that resulted in disruption of trading activities and financial loss.
The issues occurred due to a glitch in the software. The flaw here was a combination of bugs that led to delayed stock starting times. Traders dealing in FTSE 100 and FTSE 250 stocks were pushed to start their activities at 9:40 am in place of the usual 8am.
Big names, like AstraZeneca, Shell, and Unilever, were among the affected whose tradings could not be executed effectively, leading to revenue loss and demonstrated weak handling of high-volume trading propositions.
Being the second outage and the second longest since February of 2011, this business logic flaw certainly left a dent in its overall position.
How could this be avoided? By thorough testing, especially the simulation of real-world trading scenarios and stress testing. The algorithm implemented should be efficient, and the trading system should be ensured to handle heavy loads without performance degradation.
Alert and response measures should be taken seriously for a quick revitalization of the system. Contingency measures and risk assessment go a long way in managing issues because of change.
Vulnerable Industries
1. Financial Services
Financial services top the list of most vulnerable industries impacted by business logic flaws. It achieves this because of the complexity of systems managing transactions, accounts, and funds. These flaws can easily lead to financial loss, unauthorized transactions, and regulatory non-compliance.
2. Healthcare Industry
Healthcare follows closely, where software operational devices, patient record management, and electronic health records (EHR) must operate flawlessly. Sensitive medical information and its exploitation can endanger patient data.
It’s reported that 93% of healthcare organizations experienced a data breach over the last three years.
3. E-commerce and Retail
Unfortunately, due to the increasing possibilities and features in the e-commerce and retail industry, they’re extremely susceptible to business logic flaws.
These can originate from anywhere, including inventory management, flawed pricing ranges, and payment processing. They result in fraud, customer dissatisfaction, and monetary loss.
4. Supply Chain Management
The systems coordinating the supply chain are prone to disruptions that directly impact inventory availability, operational efficiency, and deliveries.
5. Transportation and Logistics
Business logic flaws impact transportation and are no strangers to the dangers posed by business logic flaws. From airline systems to fleet management, a single flaw caused by the fight management or booking systems could topple large foundational systems.
They can cause flight delays, safety concerns, and booking errors. Systems managing logistics constantly remain vulnerable to flaws that could trigger issues in supply chain management and impact delivery.
6. Government and Public Sector
Public services like tax filing and social services are handled by systems managing citizen records. If in any form, the authority is violated within the system, impact service delivery and data privacy can be compromised.
This situation could be better for any government and should serve as a reminder of constant revision to prevent business logic flaws in sensitive components.
If flaws hinder the systems managing infrastructure like utilities and emergency services, it would disrupt the services offered and, as a result, provide an unstable facility.
7. Energy and Utility
The energy and utility industry has a large expanse, and segments like power grids and water waste management are vulnerable to flaws.
Systems managing power generation and distribution are critical. Flaws could lead to operational disruptions and outages. Similarly, the software managing waste disposal or water supply management could impact environmental safety and public health.
For example, if, unfortunately, contamination enters the water disposal pipelines distributed throughout the city and triggers a health hazard within. This would be destructive for the public and would cause uproar.
Response and Recovery of High-profile Businesses
You may wonder, rightfully so, that in the instance that it all goes wrong, which admittedly is bound to happen at some point, in some capacity.
So, how do these high-profile companies bounce back? How do they cope with the hits they take?
Come rain and shine, the business thrives by maintaining these few short methodologies. Let’s discuss them:
Immediate Response
It’s necessary to offer an immediate and effective response to mitigate the impact.
Long-term strategies are to be implemented to minimize future occurrences and recognizable efforts should be made to restore customer and stakeholder faith.
The immediate response can be triggered by identifying the scope and nature of the business flaw and assessing its impact on data integrity, customer satisfaction, and operations.
Such as the case with the Boeing 737 Max. Boeing suffered from a business flaw in the 737 Max’s Maneuvering Characteristics Augmentation system (MCAS), that resulted in two fatal crashes. Along with an apology, Boeing immediately worked with aviation authorities to ground the 737 Max fleet globally.
The company communicated with its stakeholders and issued public statements to maintain trust and manage the crisis. It implemented software updates and addressed the flaws in the MCAS system.
Containment and Communication
If overwhelming, all systems affected should be discontinued shortly. The stakeholders, customers, and regulators should be notified, and steps should be taken to address the issue responsibly.
Recovery includes deploying fixes and patches for the business flaw. It shouldn’t be a quick fix; the core issue should be resolved rather than just its symptoms.
Facebook (now Meta), faced user data and privacy issues due to business logic flaws in its data management practice. it used the strategies of clear communication with customers, stakeholder engagement, and policy updates to counter the problem.
When the customers felt heard, they waited on improvements. Facebook implemented policies and features to enhance user control.
Operational continuity should be imposed by offering alternatives to the compromised situation, which helps lessen disruption.
Root-cause analysis
Based on the situation unraveled, the business must involve cybersecurity specialists, forensic or technical experts. Forensic and gap analysis helps thoroughly dissect the problem at hand, which helps prevent similar incidents.
The nature of the business flaw needs to be ruled out to make way for progress. System overhaul and financial recovery are strategies used by stock and trading markets to reinstate their positions.
Rebuilding Trust and Improvement
To maintain trust, you need the certainty of improvement. Transparency and customer outreach are key to reviving your business model.
When you’re being upfront and honest about the issue, this stops circulations of exaggerations. The handling of the issue, the revisions, and the preventions should be communicated to the stakeholders.
Rebuilding trust is all about eliminating the cause of concern or ensuring the public that your team is capable of handling it.
How To Be Proactive in Addressing Business Logic Flaws
1. Awareness culture
You only know of the problems you’re aware of; business logic flaws are no exception.
A culture of awareness can be maintained by encouraging open communication channels designed to report issues and incidents.
The organization must have workshops and training sessions tailored to discussing business logic flaws, their prevention, and mitigation. Implementing secure policies and addressing the flaws on time can foster a proactive mindset.
2. Design and architecture
The team should use a modular approach in designing the system. This helps in catering to individual elements, highlighting their issues and making it easier to fix them.
The design system must include validation rules to ensure that the business logic in data across all applications is consistent. Owing to changing trends and technology, the design must be updated to maintain itself.
3. Code Quality Assurance and Analytics
Potential logic flaws can be caught early during code reviews. Conduct code quality reviews regularly to maintain credibility. Static code analysis tools should be used to identify errors and issues in the codebases before deployment.
Analytical tools can gather data on the system’s performance. These tools can analyze data from system usage and errors to identify patterns indicating logic flaws.
3. Team Security Training
4. Team Security Training
To effectively address the flaws, security training must be held quarterly. The sessions should be updated on security threats and incident protocol response.
The alignment of industry trends, training frequency, and organizational assessment is essential to maintain vigilance.
5. Risk assessment
Organizations and startups can handle risk assessment by offering continuous code reviews.
Vulnerabilities can be identified by utilizing automated frameworks. Updated threat models aid in prioritizing mitigation efforts. It was found that thirty-six percent of respondents quoted compliance risks to increase.
Prevention of Business Logic Flaws
Prevention is always better than cure, and these tips will help you prevent business logic flaws:
- Have clear communication between all departments, including developers and business teams to help understand business needs and receive iterative feedback.
- Discount systems should be thoroughly analyzed before implementation.
- Engage with the sales and marketing team to better understand issues that might show up in that department
- Validate all inputs on both client, and server sides to prevent logical inconsistencies and attacks.
- By assigning the teams to review the code together, a comprehensive assessment of logic implementation against business expectations can be discussed.
- The company should host joint workshops to minimize pitfalls and technical issues.
- No system is bug-free, and to chase the idea would be far-fetched and unrealistic. However, you must ensure that proper error handling and fail-safes are in place to counter unforeseen circumstances.
Over to you
Business logic flaws have plagued even the largest of businesses. From this article, businesses can learn how they can identify and understand these logical flaws to help mitigate and counter them effectively.