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Penetration Testing Services vs. Bug Bounty Programs

While in the Kingdom of Saudi Arabia for the @Hack cybersecurity conference, we noticed a disconnect in the understanding of penetration testing. Many of the people we spoke with assumed pentesting and bug bounty programs were one and the same.

Spoiler alert: that assumption is incorrect. While they share a similar goal, pentesting services and bug bounties vary in impact and value.

In an effort to demystify the two vulnerability discovery activities, in this blog we will cover how each are used in practice, key differences, and explain the risks associated with solely relying on bug bounties.

What is a Bug Bounty Program?

Simply put, a bug bounty program consists of ethical hackers exchanging critical vulnerabilities, or bugs, for recognition and compensation. 

The parameters of a bug bounty program may vary from organization to organization. Some may scope out specific applications or networks to test and some may opt for a “free-for-all” approach. Regardless of the parameters, the process remains the same. A hacker finds a vulnerability, shares it with the organization, then, once validated, the organization pays out a bounty to the hacker. 

For a critical vulnerability finding, the average payout rose to $3,000 in 2021. Bounty payments have come a long way since 2013’s ‘t-shirt gate,’ where Yahoo offered hackers a $12.50 company store credit for finding a number of XSS (cross-site scripting) vulnerabilities – yikes.

What is Penetration Testing?

Penetration testing is an offensive security activity in which a team of pentesters, or ethical hackers, are hired to discover and verify vulnerabilities. Pentesters simulate the actions of a skilled adversary to gain privileged access to an IT system or application, such as cloud platforms, IoT devices, mobile applications, and everything in between. 

Pentesting also helps organizations meet security testing requirements set by regulatory bodies and industry standards such as PCI and HIPAA.

Pentesters use a combination of automated vulnerability discovery and manual penetration testing techniques. They work collaboratively to discover and report all vulnerability findings and help organizations with remediation prioritization. Pentesting partners like NetSPI work collaboratively with in-house security teams and are often viewed and treated as an extension of that team.

Penetration testing has evolved dramatically over the past five years with the emergence of penetration testing as a service (PTaaS). PTaaS enables more frequent, transparent, and collaborative testing. It streamlines vulnerability management and introduces interactive, real-time reporting. 

As an industry, we’ve shifted away from traditional pentesting where testers operate behind-the-curtain, then deliver a long PDF list of vulnerabilities for security teams to tackle on their own.

What is Penetration Testing?
For a more detailed definition, how it works, and criteria for selecting your penetration testing partner, read our guide.

6 Core Differences Between Pentesting and Bug Bounties

So, what are the greatest differences between pentesting and bug bounties? Let’s break it down into six components: personnel, payment, vulnerabilities, methodology, time, and strategy.

Personnel

Pentesters are typically full-time employees that have been vetted and onboarded to provide consistent results. They often work collaboratively as a team, rather than relying on a single tester. 

Bug bounty hackers operate as independent contractors and are typically crowdsourced from across the globe. Working with crowdsourced hackers can open the door to risk, given you cannot be 100% confident in their intentions and motives. 

Will they sell the intel they gather to a malicious party for additional compensation? Will they insert malicious code during a test? With full-time employees, there are additional guardrails and accountability to ensure the hacking is performed ethically.

Payment

With penetration testing vendors, the payment model can vary. Cost is often influenced by the size of the organization, the complexity of the system or application, vendor experience, the scope, depth, and breadth of the test, among other factors. 

With a bug bounty program, the more severe the vulnerability, the more money a bug bounty hunter makes. Keep in mind that negotiation of the bounty payment is very common with bug bounty programs, so it is important to factor in the time and resources to manage those discussions.

Additionally, one cause for concern with bug bounty payments is that instead of reporting vulnerabilities as they are found, it’s common for hackers to hold on to the most severe vulnerabilities for greater payout and recognition during a bug bounty tournament. 

Vulnerabilities

Because of the pay-per-vulnerability model bug bounty programs follow, it’s no surprise that many are focused solely on finding the highest severity vulnerabilities over the medium and low criticality ones. However, when chained together, lower severity vulnerabilities can expose an organization to significant risk.

This is a gap that penetration testing fills. Penetration testers chain together seemingly low-risk events to verify which vulnerabilities enable unauthorized access. Pentesters do prioritize critical vulnerabilities, but they also examine all vulnerabilities with a business context lens and communicate the risk each could pose to operations if exploited.

Vulnerability findings aside, there are also key differences in how the results are delivered. With bug bounties, it’s up to the person who found the vulnerability to decide when to disclose the flaw to the program – or save it for a tournament as mentioned above, or even disclose it publicly without consent.

Modern penetration testing companies like NetSPI operate transparently and report findings in real time as they are discovered. Plus, pentesters validate and retest to confirm the vulnerability exists, evaluate the risk it poses, and determine if it was fixed effectively.

Methodology

The greatest difference in the testing methodology of bug bounty programs and penetration testing services is consistency.

From our discussions with security leaders, the biggest challenge they face with bug bounty programs is that service, quality, project management, and other key methodology factors often lack consistency. Notably, the pool of independent contractors varies across experience and expertise. And the level of effort diminishes as rewarding, critical vulnerabilities are found and researchers move on to opportunities with greater opportunity for compensation.

Penetration testing is more methodical in nature. Testers follow robust checklists to ensure consistency in the testing process and make certain that they are not missing any notable gaps in coverage. They also hold each other accountable by working on teams. At NetSPI, our pentesters use the workbench in our Resolve PTaaS technology platform to collaborate and maintain consistency.

For any organization that has legal, regulatory, or contractual obligations for a robust security testing bug bounties simply cannot meet those requirements. Bug bounty programs are opportunistic. There is no assurance of full coverage testing as they do not adhere to defined methodology or checklists to ensure consistency from assessor to assessor, or assessment to assessment. Some bug bounties can use checklists upon request – for a hefty added cost.

Time

While bug bounty programs are evergreen and always-on, traditional penetration testing has been limited by time-boxed assessments.

To address this, first and foremost we recommend organizations provide their pentesting team with access to source code or perform a threat modeling assessment to equip their team with information a malicious hacker could gain access to in the wild. This allows pentesters to accurately emulate real attackers and spend more time finding business critical vulnerabilities.

The pentesting industry is rapidly evolving and is becoming more continuous, thanks to the PTaaS delivery model and attack surface management. Gone are the days of annual pentests that check a compliance box. We see a huge opportunity for integration with attack surface management capabilities to truly offer continuous testing of external assets.

Strategy

Penetration testing is a strategic security activity. On the other hand, bug bounty programs are very tactical and transactional: find a vulnerability, report it, get paid for it, then move on to the next hunt.

As noted earlier, penetration testing is often viewed as an extension of an internal security team and collaborates closely with defensive teams. You can also find pentesting partners that offer strategic program maturity advisory services. Because of this, pentesters deeply understand the systems, networks, applications, etc. and can assess them holistically. This is particularly beneficial for complex systems and large organizations with massive technology ecosystems.

Furthermore, strategic partnerships between penetration testing vendors and their partners lead to a greater level of trust, institutional knowledge, and free information exchange. In other words, when you work with a team of penetration testers on an ongoing basis, their ability to understand the mechanics of your company and its technologies lends itself to discovering both a greater number and higher quality of vulnerabilities.

Final Thoughts

The way penetration testing has and continues to evolve fills many of the gaps left by bug bounty programs. There is certainly room for both bug bounty programs and penetration testing in the security sector – in many cases the services complement one another. However, it is important to understand the implications and risks associated when deciding where to focus your efforts and budget.