Sample operational risk controls for digital banking
The core digital banking controls are multi-factor authentication and transaction monitoring against fraud, encryption and access control against data breaches, redundancy and disaster recovery against outages, vendor due diligence and contracts against third-party failure, and customer education against social engineering. AI adds chatbot guardrails, deepfake-resistant verification and monitoring of AI fraud models for drift.
The table below is taken from the Digital Banking function of the Doorstep risk register, with an AI-era addition for each risk.
What are the key digital banking risks and controls?
| Risk | Register controls | AI-era addition |
|---|---|---|
| Cybersecurity risks in digital channels | Multi-factor authentication; encryption | Phishing-resistant MFA; prompt-injection testing for chatbots |
| Identity theft and fraud | Multi-factor authentication; customer verification | Liveness checks against deepfakes in onboarding |
| Fraudulent digital payments | Multi-factor authentication; transaction monitoring | Monitor fraud-model drift; human review of model overrides |
| System outages in digital payments | Redundancy and disaster recovery; monitoring and alerting | Fallback when AI services or providers fail |
| Third-party risks | Vendor due diligence; contractual agreements | AI provider concentration mapping and exit plans |
| Privacy risks | Data encryption; access control | Block personal data in unapproved AI tools |
| Insufficient customer education | User education programmes | Warn customers about AI-voice scams impersonating the bank |
Should digital banks keep manual fallback controls?
Yes. Fallbacks are what keep critical services running when automation, AI or a provider fails. Test them, because untested fallbacks fail when needed. The founder's article on fallback controls for digital banks explores the trade-offs.
Primary sources (reviewed 17 Oct 2026)
- Basel Committee: Revisions to the Principles for the Sound Management of Operational Risk (March 2021)
- Basel Committee: Principles for Operational Resilience (March 2021)
- Regulation (EU) 2022/2554, Digital Operational Resilience Act (DORA)
This page explains supervisory guidance in plain language. It is not legal advice; confirm how each text applies to your institution and jurisdiction.
Frequently asked questions
What is the most important control in digital banking?
Strong customer authentication combined with real-time transaction monitoring addresses the largest share of fraud and account takeover losses.
Put these controls to work this month
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