What is penetration testing? Step-by-step process

As large enterprises pour substantial resources into cybersecurity, small to midsized businesses (SMBs) are becoming prime targets for cybercriminals, as highlighted by the FBI’s Internet Crime Complaint Center. If your SMB were to face a cyberattack, what might that scenario look like?

The most effective way to uncover potential vulnerabilities—and to bolster your defenses—is to proactively test your systems by having someone attempt to breach them. This can be achieved through a cybersecurity forensics method known as penetration testing. By hiring experts to simulate a sophisticated hacking attempt on your business, you can gain valuable insights into how a real cyberattack might unfold, identify weaknesses in your security measures, and take the necessary steps to fortify your defenses before an actual threat occurs.

Penetration testing explained

Penetration testing, commonly referred to as pen testing, is a controlled simulation of cyberattacks conducted by businesses to uncover vulnerabilities and potential exploitation points in their computer systems, networks, IT infrastructure, and other critical assets.

To execute a pen test, businesses can enlist the services of reputable third-party companies that specialize in ethical hacking. These professionals, known as pen testers, employ the same tools and techniques as malicious hackers to mimic real-world attacks. The insights gained from these tests allow businesses to develop robust security strategies based on the vulnerabilities identified.

A key component of penetration testing is the vulnerability assessment, which is designed to reveal security weaknesses through either manual or automated methods. While vulnerability assessments can be standalone processes, they are integral to pen testing, as they identify the security gaps that the pen testers will then attempt to exploit.

Think of a vulnerability assessment as someone surveying a house for potential entry points, such as unlocked windows and doors. A penetration test would then go a step further by using those entry points to break into the house, assessing how much damage could be inflicted or what could be stolen—all while avoiding detection. This approach provides businesses with a realistic view of their security posture and helps them address any weaknesses before they can be exploited by actual cybercriminals.

Benefits of penetration testing

Penetration testing offers several key benefits, with the most apparent being the ability to identify security weaknesses. By uncovering vulnerabilities, businesses can plan and allocate resources effectively to safeguard operations and protect sensitive data. As your business evolves, new vulnerabilities may emerge, or hackers may develop new tactics that could exploit your systems. Regular pen testing keeps your security measures up-to-date, allowing you to adapt your strategies to prevent cyberattacks or minimize damage if a breach occurs.

Beyond the obvious advantages, there are several additional benefits to conducting regular pen tests:

• Compliance with security and privacy standards: Depending on the nature and volume of sensitive data your business handles, you may be required to adhere to specific privacy and security standards, as well as government-mandated regulations. For instance, if your business processes or stores credit card information, you must comply with the Payment Card Industry Data Security Standard (PCI DSS) or face potential fines. Regular pen testing ensures that your business meets these standards, preparing you for audits and preventing unexpected penalties for noncompliance.
• Protecting business reputation and customer data: While maintaining a strong security posture is essential, penetration testing specifically contributes to safeguarding your business's reputation. By preventing data breaches that could expose sensitive client or partner information, you can avoid a potential public relations crisis and build trust with your customer base.
• Unbiased perspective on infrastructure: Engaging third-party experts for pen testing brings the advantage of an impartial evaluation of your systems. These fresh perspectives can uncover overlooked vulnerabilities and offer innovative suggestions for enhancing your security infrastructure.
• Reduced premiums for liability insurance: Some cyber insurance providers recognize the value of regular penetration testing by offering discounts on premiums. By demonstrating a proactive approach to cybersecurity, your business may qualify for lower rates on liability insurance.

Overall, penetration testing is a critical tool in a comprehensive cybersecurity strategy, helping businesses not only identify and address vulnerabilities but also achieve compliance, protect their reputation, gain fresh insights, and potentially reduce insurance costs.

How penetration testing works

Penetration testing is a methodical process that involves several key steps, including the establishment of rules of engagement and the creation of an attack profile. The process typically unfolds across seven distinct phases, each designed to mimic the tactics of real-world cyberattacks.

Rules of Engagement (ROE)

Before initiating a pen test, it's crucial to establish rules of engagement (ROE). These rules define the scope, objectives, and boundaries of the test, ensuring that both the testers and the business are aligned on what is to be tested and what the expected outcomes are. ROE documents also serve as legally binding contracts, outlining any systems or data that are off-limits during the test. By setting these parameters upfront, businesses can ensure that the pen test is conducted safely and effectively, without disrupting critical operations or violating compliance standards.

Attack profile

To simulate various types of cyberattacks under different conditions, organizations provide pen testers with varying levels of information about the environment they will be testing. This approach is known as the attack profile, which can take one of three forms:

• White-box pen testing: In this scenario, testers are given full access to information about the environment, including network architecture, source code, and security measures. This type of testing simulates an attack by an experienced insider, such as a disgruntled employee or a contractor with extensive system knowledge. White-box testing can also serve as a follow-up to other types of pen tests, providing a comprehensive assessment of security vulnerabilities.
• Gray-box pen testing: Here, testers are provided with partial information about the environment. This type of test simulates an attacker who has some insider knowledge—perhaps a former employee or a business partner—but still needs to conduct some reconnaissance to execute a successful attack. Gray-box testing strikes a balance between depth and realism, allowing testers to explore potential weaknesses without complete visibility.
• Black-box pen testing: In black-box testing, testers receive no prior information about the environment. This type of test simulates an external attack, where the attacker has no insider knowledge and must rely entirely on reconnaissance to gather information. Black-box testing is ideal for assessing how well a business's security measures can withstand an attack from an unknown and untrusted source.

These different approaches allow businesses to understand how vulnerable they are to various types of cyberattacks, enabling them to strengthen their defenses accordingly. By working through these steps and phases, penetration testing provides a realistic and thorough evaluation of a business's cybersecurity posture.

Penetration testing teams

Penetration testing is a unique blend of cooperation and adversarial challenge, requiring collaboration between the testers and the business they are hired to evaluate. Typically, the business's cybersecurity team—if one exists—participates in the test, playing a crucial role as the "defense" to counter the simulated threats posed by the testers. To foster a collaborative environment, participants are divided into teams identified by color, rather than using terms like "attacker" and "defender."

Red team: The red team is responsible for the offensive side of the test. Acting according to the attack profile and the goals outlined in the rules of engagement (ROE), the red team simulates the behavior of real attackers, attempting to breach the business’s security defenses.

• Blue team: The blue team represents the defense, tasked with protecting the environment and thwarting the red team’s attempts to compromise the system. Their goal is to detect, respond to, and neutralize the simulated attacks, providing a real-time assessment of the business’s defensive capabilities.
• White team: The white team acts as the referees or overseers of the test. Their role is to ensure that both the red and blue teams adhere to the ROE and to address any questions or issues that arise during the exercise. The white team also has the authority to halt the test if necessary, ensuring the process remains controlled and safe.
• Purple team: Rather than being a separate team, the purple team is more of a methodology that arises when the red and blue teams come together to collaborate. This occurs during debriefings or midway through the test to discuss progress, share insights, and educate the blue team on defense techniques. The purple team approach helps reduce the adversarial nature of the test, promoting a more cooperative atmosphere and enhancing the learning experience for all involved.

By dividing responsibilities in this way, penetration testing not only evaluates the effectiveness of a business's security measures but also encourages collaboration and knowledge sharing between the offensive and defensive teams. This structured approach ensures that the test is both rigorous and constructive, providing valuable insights for improving overall cybersecurity.

Phases of Penetration Testing

The Penetration Testing Execution Standard (PTES) is a widely adopted framework that outlines the process of pen testing through seven distinct phases. Some of these phases may form a loop, repeating as necessary until the test is thoroughly completed.

Phase 1: Pre-engagement

The pre-engagement phase is where the groundwork for the penetration test is laid. During this stage, the client and the pen tester collaborate to define the rules of engagement (ROE), establish the scope of the test, and customize it to address the specific needs and concerns of the business. This phase concludes with the signing of contracts and the creation of a statement of work, which formally outlines the objectives and expectations for the test.

Phase 2: Intelligence gathering

In the intelligence gathering phase, testers collect information about the target environment. The extent of the information gathered depends on the type of test being conducted. For gray- and white-box tests, this phase may involve reviewing detailed information provided by the client, such as network diagrams, system configurations, and security policies. In black- and gray-box tests, testers must rely on passive and active reconnaissance techniques to gather as much intelligence as possible without prior knowledge. This might include scanning networks, researching public databases, and even social engineering tactics to uncover vulnerabilities.

Phase 3: Threat modeling

With the intelligence gathered, testers proceed to the threat modeling phase, where they analyze the information to identify and prioritize potential targets within the environment. This phase involves evaluating the value and sensitivity of different assets, assessing the difficulty of exploiting them, and determining how best to simulate the capabilities of a potential attacker. Testers weigh the potential impact of an attack on each target, considering factors such as the likelihood of success, the potential damage, and the alignment with the objectives outlined in the ROE. This careful planning helps ensure that the test is both realistic and effective, focusing on the most critical areas of vulnerability.

Phase 4: Vulnerability assessment

In the vulnerability assessment phase, the red team focuses on identifying weaknesses within the selected targets. Leveraging the intelligence gathered in the previous phases, the team employs various tools and techniques to search for vulnerabilities in systems, applications, networks, and other components. This phase is critical as it lays the groundwork for the subsequent exploitation phase by pinpointing the specific entry points that attackers could use to compromise the environment.

Phase 5: Exploitation

Once vulnerabilities are identified, the red team moves into the exploitation phase, where they attempt to breach the target systems using the discovered weaknesses. The team employs a range of hacking tools and techniques, which may include well-known exploits or even custom-developed strategies tailored to the specific environment. The objective is to gain unauthorized access, exfiltrate data, or achieve other goals outlined in the rules of engagement (ROE). This phase tests the real-world effectiveness of the identified vulnerabilities and provides valuable insights into how an actual attacker might compromise the system.

Phase 6: Post-exploitation

If the red team successfully exploits a vulnerability, they proceed to the post-exploitation phase, where they explore the impact of their access and attempt to achieve the specific goals set by the client in the ROE. This phase includes several key activities:

• Obtaining persistence: The team attempts to maintain their access even if the initial vulnerability is patched or the attack vector is closed. This could involve installing backdoors, creating new user accounts, or employing other techniques to ensure continued access.
• Cleanup: To mimic the behavior of a stealthy attacker, the red team tries to erase any traces of their activities, such as log entries, to avoid detection and leave no evidence of the exploit.
• Pivoting: Also known as lateral movement, pivoting involves using the access gained in the initial exploit to compromise other systems within the environment. For example, the team might use credentials obtained from an employee's compromised computer to gain access to a web server that was previously out of reach.
• Privilege escalation: The red team may also attempt to escalate their privileges within the environment by exploiting additional vulnerabilities, allowing them to gain higher levels of access and control over the target systems.

Phase 7: Reporting

The final phase of the penetration test is reporting, where the pen testers compile a comprehensive report detailing their findings. This report includes a thorough account of every vulnerability discovered, the tools and techniques used during the test, and recommendations for remediation. Additionally, the report highlights any failed attempts or goals that were not achieved, providing valuable feedback for improving the organization's security posture. The detailed documentation serves as a critical resource for the client, helping them understand their current security weaknesses and guiding them in enhancing their defenses against future attacks.

Drawbacks of penetration testing

While penetration testing offers significant benefits in identifying and mitigating security risks, it does come with some potential drawbacks that businesses should consider.

Regular pen testing can be expensive

One of the primary concerns, especially for small to midsized businesses (SMBs), is the cost associated with regular penetration testing. Large enterprises can afford to invest in frequent and thorough pen tests, but SMBs might find the expense prohibitive. According to cybersecurity provider Packetlabs, the cost of a pen test can range from $5,000 on the lower end to over $100,000 for more extensive and frequent testing. For businesses with limited budgets, this expense can be a significant barrier. However, SMBs should weigh the cost of pen testing against the potential losses from a data breach. If the financial impact of a breach exceeds the cost of regular pen testing, it may be a worthwhile investment.

Results of pen tests are proportional to their scope

The effectiveness of a penetration test is directly related to the scope and depth of the testing process. Larger businesses that can allocate more resources to pen testing can afford comprehensive assessments that cover a wide range of systems and potential vulnerabilities. In contrast, SMBs might struggle to determine the appropriate scope for their tests. Overspending on a test that is too broad for their needs can waste valuable resources, while underspending on a test that is too narrow could result in a false sense of security, leaving critical vulnerabilities unaddressed. Striking the right balance is crucial, and businesses must carefully evaluate their specific needs and risks to determine the appropriate level of investment in pen testing.

Pen testing requires third parties to handle sensitive data

Penetration testing typically involves hiring third-party experts to conduct the tests, which introduces a level of risk related to data privacy and trust. While the advantage of using an external party lies in their unbiased perspective and expertise, it also requires businesses to trust these third parties with sensitive information about their systems and security protocols. The risk of exposing confidential data to outsiders means that businesses must thoroughly vet potential pen testing providers. Ensuring that the chosen provider has a solid reputation, a proven track record, and strict confidentiality agreements in place is essential to mitigate this risk.