Top Risks and Controls for Information Security

The Fastest Growing RISK REGISTER for Banks, Insurance Companies, Brokerage Firms, Money Service Bureaus and Fintechs

Dec 2024

Commercial banks are under increasing attack from cybercriminals in the digital age who want to steal private financial data and interfere with essential banking processes.

Therefore, in order to safeguard against potential security breaches, banks must establish strong information security procedures.

A commercial bank's information security function relies heavily on risk assessment to help it recognise and assess potential security risks and vulnerabilities.

Regular risk assessments allow banks to proactively address security threats and put in place strong controls to protect their infrastructure and sensitive data, thereby maintaining the security and safety of their clients' financial information.

Cryptography and Key Management Function

This division is in charge of the bank's encryption systems and ensures that cryptographic keys are used and stored securely.

RISK : Insider Threats
Insider threats, including employees with malicious intent, could use their authorized access to the encryption systems and cryptographic keys to compromise the bank's security.

Controls :

Background Checks: Conducting thorough background checks and screening for new employees who will have access to the encryption systems and cryptographic keys can help detect and prevent potential insider threats.
Employee Training and Awareness: Providing regular training and awareness programs to employees about the importance of information security, policies, procedures, and consequences of non-compliance.
Role-Based Access Control: Restricting access to the encryption systems and cryptographic keys to only those employees who require it for their job duties and based on the principle of least privilege is the most effective control to mitigate the risk of insider threats.

RISK : Malware Attacks
Malware, including viruses, worms, and Trojans, could be used to gain unauthorized access to the encryption systems and cryptographic keys or corrupt them.

Controls :

Secure Software and Patch Management: Ensuring that all software, including operating systems, applications, and encryption software, is regularly updated with the latest security patches and fixes is essential. Vulnerabilities in software can be exploited by malware to gain unauthorized access.
Strong Endpoint Protection: Implementing robust endpoint protection solutions, such as antivirus software, anti-malware scanners, and host intrusion prevention systems (HIPS), is crucial. These tools help detect and prevent malware infections on individual devices, including computers, servers, and mobile devices.

RISK : Misuse of Encryption
Improper use of encryption by authorized personnel could lead to data being encrypted with weak algorithms or keys, making it easier for attackers to decrypt and steal sensitive data.

Controls :

Access Controls: Restricting access to encryption software and keys to authorized personnel can limit the risk of improper use.
Encryption Policy: Establishing an encryption policy that outlines proper encryption algorithms and key management practices is the most effective control to mitigate the risk.
Training and Awareness: Providing regular training and awareness programs to authorized personnel on encryption best practices, risks, and consequences of improper use of encryption can help ensure they are properly equipped to use encryption.

RISK : Unauthorized Access
Unauthorized individuals gaining access to the encryption systems and cryptographic keys could lead to a breach of sensitive data.

Controls :

Access Control: Implementing strong access controls is crucial to prevent unauthorized individuals from gaining access to encryption systems and cryptographic keys. This involves implementing measures such as strong passwords, multi-factor authentication, and role-based access control (RBAC) to ensure that only authorized individuals can access and manage these systems and keys.
Encryption Key Management: Proper management of encryption keys is essential to safeguard sensitive data. This includes secure key generation, distribution, storage, rotation, and revocation.

Data Loss Prevention (DLP) Function

In order to prevent the loss or theft of sensitive data, such as client information and financial records, this section manages the bank's systems and procedures.

RISK : Data Breaches
The unauthorized access to sensitive data, such as customer information or financial records, by an attacker who gains access to the bank's systems.

Controls :

Encryption: Encryption protects sensitive data by converting it into a form that is unreadable without the correct decryption key.
Multi-Factor Authentication (MFA): MFA is the most effective control to mitigate the risk of unauthorized access. It requires users to provide two or more authentication factors, such as a password and a fingerprint or facial recognition, to gain access to the bank's systems.
Network Segmentation: Network segmentation separates the bank's sensitive data and systems from the rest of the network, making it harder for an attacker to access sensitive information if they gain access to the network.

RISK : Insider Threats
The misuse or theft of sensitive data by an authorized employee, contractor, or vendor.

Controls :

Access Control: Implementing a robust access control system is crucial in mitigating the risk of data misuse or theft. This control involves granting employees, contractors, and vendors appropriate levels of access privileges based on their roles and responsibilities. This ensures that individuals can only access the data necessary for their job functions, reducing the likelihood of unauthorized access.
User Training and Awareness: Educating employees, contractors, and vendors about data security policies, best practices, and potential risks is essential.

RISK : Malware Attacks
The introduction of malicious software, such as viruses or ransomware, that can infect and damage the bank's systems or steal sensitive data.

Controls :

Network Segmentation and Perimeter Defense: Implementing network segmentation and deploying robust perimeter defense mechanisms are essential to mitigate the risk of introducing malicious software. Network segmentation involves dividing the bank's network into smaller, isolated segments, reducing the potential impact of an infection. By implementing firewalls, intrusion detection and prevention systems, and strong access controls at the network perimeter, unauthorized access and the spread of malware can be effectively controlled. Regular monitoring and analysis of network traffic provide early detection of potential threats, allowing for prompt response and mitigation actions.
Robust Endpoint Protection: Implementing robust endpoint protection measures is crucial to safeguarding the bank's systems. This includes using reputable antivirus and anti-malware software on all endpoints, such as desktop computers, laptops, and mobile devices. Regularly updating and patching these security tools ensures they can detect and mitigate the latest threats effectively.

RISK : Phishing Attacks
The use of fraudulent emails, phone calls, or text messages to trick employees into revealing sensitive data or providing access to the bank's systems.

Controls :

Email and Web Filtering: Using email and web filtering technologies can help identify and block phishing emails and websites, reducing the likelihood that an employee will fall victim.
Employee Training and Awareness: This is the most effective control to mitigate the risk. Training employees on how to identify and avoid phishing attacks can significantly reduce the risk of successful attacks.
Multi-Factor Authentication: Implementing multi-factor authentication (MFA) can help prevent unauthorized access to the bank's systems, even if an attacker has obtained an employee's login credentials.

Identity and Access Management (IAM) Function

The systems and procedures used by the bank to confirm users' identities and restrict access to sensitive information and systems are managed by this division.

RISK : Insider Threats
Insider threats are risks posed by employees, contractors, or third-party vendors with authorized access to sensitive data and systems.

Controls :

Access Controls and User Privileges: Implementing strong access controls and user privileges is essential to minimize the risk of insider threats. This control includes the principle of least privilege, which ensures that individuals only have access to the systems and data necessary for their roles. By limiting access rights and implementing strict authentication mechanisms, organizations can reduce the potential for unauthorized actions by insiders.
Security Awareness and Training Programs: Implementing robust security awareness and training programs is crucial for mitigating insider threats. By educating employees, contractors, and third-party vendors about the risks associated with sensitive data and systems, organizations can increase their understanding of potential threats and encourage responsible behavior. These programs should cover topics such as identifying suspicious activities, reporting incidents, and adhering to security policies and best practices.

RISK : Malware and Viruses
Malware and viruses can infect systems and steal sensitive data, disrupt business operations, or cause reputational damage.

Controls :

Antivirus Software: Installing and regularly updating antivirus software is the most effective control to mitigate the risk of malware and viruses. Antivirus software can detect and remove malicious software before it can cause damage.
Employee Training: Regularly training employees on safe computing practices, such as not opening suspicious emails or clicking on suspicious links, can help mitigate the risk of malware and virus infections caused by human error.
System Updates and Patches: Regularly updating and patching operating systems, applications, and other software can help mitigate the risk.

RISK : Unauthorized Access
The risk of unauthorized access to sensitive data and systems can lead to data breaches, theft, and fraud.

Controls :

Access Control: Implementing strong access control measures is crucial to protect sensitive data and systems. This includes employing a combination of methods such as role-based access control (RBAC), strong authentication mechanisms (e.g., two-factor authentication), and least privilege principles. Access control ensures that only authorized individuals can access sensitive data and systems, reducing the risk of unauthorized access and potential breaches.
Data Encryption: Implementing robust data encryption measures is crucial in mitigating the risk of unauthorized access to sensitive data and systems. Encryption transforms data into an unreadable format that can only be deciphered with the appropriate encryption key. By encrypting data at rest (when stored) and in transit (during transmission), you significantly reduce the chances of unauthorized individuals gaining access to the information. In the event of a breach or theft, the encrypted data remains inaccessible and unusable, adding an additional layer of protection against potential fraud and data breaches.

RISK : Weak Authentication
Weak authentication methods, such as using easily guessable passwords or using default credentials, can put sensitive data at risk.

Controls :

Default credential policies: Ensuring that default credentials are changed or disabled can prevent unauthorized access.
Multi-factor authentication (MFA): Implementing MFA can significantly reduce the risk of weak authentication methods by requiring users to provide additional credentials, such as a security token or a biometric identifier, in addition to a password.
Password managers: Using a password manager can help users generate and securely store complex passwords, reducing the risk of weak authentication methods.
Password policies: Establishing strong password policies can help prevent weak passwords and reduce the risk of unauthorized access. This includes requirements for password length, complexity, and expiration.

Network Security Function

This department oversees the security of the bank's network, which includes traffic monitoring, firewall and intrusion detection system management, and network segmentation.

RISK : Advanced Persistent Threats (APTs
These are targeted attacks that may go undetected by traditional security controls and can lead to theft or exfiltration of sensitive data.

Controls :

Endpoint Detection and Response (EDR): EDR solutions can detect advanced threats that bypass traditional security controls by monitoring endpoints and identifying malicious activity.
Network Segmentation: Segmenting the network can limit the attacker's ability to move laterally and access sensitive data.
Security Information and Event Management (SIEM): SIEM solutions can detect and respond to threats by aggregating and analyzing security logs and events across the network.

RISK : Ransomware attacks
These are types of malware that encrypt files and systems until a ransom is paid to the attackers. Such attacks can cause significant disruption to the bank's operations.

Controls :

Endpoint Protection: Implementing robust endpoint protection solutions, such as advanced antivirus and anti-malware software, can significantly reduce the risk of ransomware infections. These solutions should be regularly updated and configured to detect and block known malware signatures and suspicious activities.
Regular Data Backups: Performing regular and automated backups of critical data is essential for mitigating the impact of ransomware attacks. Backups should be stored in offline or isolated systems to prevent them from being affected by the ransomware.

RISK : Supply chain attacks
These occur when attackers target third-party vendors or partners of the bank, which can then be used as a gateway to attack the bank's network.

Controls :

Contractual Protections: Contracts with third-party vendors should include clauses that specify security requirements, liability, and indemnification in case of a breach.
Security Controls: The bank should require third-party vendors to implement appropriate security controls, such as multi-factor authentication, encryption, and access controls, to protect against unauthorized access.
Third-party Risk Management: The most effective control is to implement a comprehensive third-party risk management program, which includes vetting vendors, assessing their security posture, and monitoring their compliance with the bank's security policies.

Security Architecture Function

The security infrastructure of the bank, which includes firewalls, intrusion detection systems, and encryption technologies, is designed and put into place by this team.

RISK : Inadequate design
The security infrastructure may be inadequately designed, leading to vulnerabilities that can be exploited by hackers or other malicious actors.

Controls :

Access Control: Limiting access to critical systems and data to authorized personnel can reduce the risk of unauthorized access or misuse of sensitive information.
Encryption: Encryption can protect sensitive data by rendering it unreadable and useless to hackers or unauthorized users.
Patch Management: Ensuring that security patches and updates are regularly applied to all systems can reduce the risk of exploits that target known vulnerabilities.
Regular Security Assessments: Regular security assessments, including vulnerability assessments and penetration testing, can identify and address security vulnerabilities in the infrastructure. This is the most effective control to mitigate the risk.

RISK : Insufficient testing
Failure to adequately test security systems and infrastructure can lead to undetected vulnerabilities.

Controls :

Penetration Testing: Penetration testing, also known as ethical hacking, involves simulating real-world attacks to identify vulnerabilities in your systems. Skilled security professionals attempt to exploit weaknesses and gain unauthorized access to your infrastructure.
Regular Security Testing and Vulnerability Assessments: Conducting regular security testing and vulnerability assessments is crucial to identify weaknesses and vulnerabilities in your systems and infrastructure. This includes both automated scans and manual testing by skilled security professionals. By proactively seeking out vulnerabilities, you can address them before they can be exploited.

RISK : Lack of awareness
Employees may not be aware of the latest security threats and best practices, leaving the bank vulnerable to attacks.

Controls :

Security Awareness Training: Implementing a comprehensive security awareness training program is crucial to educate employees about the latest security threats and best practices. This should include regular training sessions, workshops, and simulations to ensure employees are equipped with the knowledge to identify and respond to potential security risks.
Strong Password Policies: Enforcing strong password policies is essential to mitigate the risk of unauthorized access. Employees should be educated on creating strong passwords, using unique credentials for different accounts, and regularly updating passwords.

RISK : Misconfigured systems
Security systems may be misconfigured, allowing attackers to bypass security controls and gain unauthorized access to sensitive information.

Controls :

Access Control: Limiting access to security systems to authorized personnel can help prevent misconfigurations and reduce the risk of unauthorized access.
Configuration Management: Configuration management practices can help ensure that security systems are properly configured and maintained. This includes documenting configurations, monitoring changes, and testing configurations before deployment.
Regular Security Assessments: Regular security assessments can help identify misconfigurations and vulnerabilities in security systems. These assessments should be conducted by qualified professionals and should include both technical and procedural assessments.

Security Compliance and Governance Function

This division makes ensuring that the bank's security policies and practises adhere to applicable legal requirements and standard operating procedures. To ensure continued compliance, this unit also supervises security audits and assessments.

RISK : Failure to detect security incidents
Failure to detect security incidents in a timely manner may result in a prolonged exposure of the bank's systems to malicious actors.

Controls :

Intrusion Detection and Prevention Systems (IDPS): IDPS is the most effective control to detect and prevent security incidents in a timely manner. It can monitor network traffic, detect suspicious activity, and trigger alarms or alerts when potential security breaches are identified.
Log Monitoring and Analysis: Logging and monitoring all system and network activity can provide valuable information to identify and investigate security incidents. Analyzing logs can help identify patterns of behavior that may indicate a security threat.
Security Information and Event Management (SIEM): SIEM solutions can collect and correlate security events from various sources to identify potential security incidents.

RISK : Inadequate security controls
Inadequate security controls may lead to data breaches or other security incidents.

Controls :

Access Control: Implementing strong access control mechanisms is crucial to ensure that only authorized individuals have access to sensitive data and systems. This includes using strong passwords, multi-factor authentication, role-based access controls, and regular access reviews to minimize the risk of unauthorized access.
Data Encryption: Implementing strong data encryption measures is essential for safeguarding sensitive information from unauthorized access. Encryption transforms data into an unreadable format using cryptographic algorithms, ensuring that even if the data is intercepted or accessed without authorization, it remains unusable. By encrypting data at rest and in transit, organizations significantly reduce the risk of data breaches and protect the confidentiality and integrity of their information assets.

RISK : Insufficient staff training
Insufficient staff training may lead to a lack of understanding of security policies and procedures and potential non-compliance.

Controls :

Regular Training Programs: Regular training programs should be conducted to educate staff on security policies and procedures and to ensure that they stay up to date with the latest security practices.
Strong Documentation: Clear and concise documentation of security policies and procedures should be available to all staff members, which should be easily accessible and updated regularly.
Testing and Assessment: Regular testing and assessment of staff knowledge and compliance with security policies and procedures can help identify gaps and areas for improvement.

RISK : Regulatory non-compliance
Failure to comply with relevant regulatory requirements could result in penalties, fines, or legal action.

Controls :

Regulatory Compliance Training and Education: Implement a comprehensive training program for employees to ensure they are aware of the relevant regulations, their responsibilities, and the potential consequences of non-compliance. This should include regular updates to keep employees informed about any changes in regulations. By educating employees, you can reduce the likelihood of unintentional violations and promote a culture of compliance within the organization.
Robust Compliance Monitoring and Auditing: Establish a systematic process to monitor and audit compliance with regulatory requirements.

Security Operations Center (SOC) Function

This department is in charge of keeping an eye on security threats and incidents on the bank's systems and networks, as well as of looking into incidents and responding to security lapses.

RISK : Advanced Persistent Threats (APTs)
Highly sophisticated and targeted attacks that evade traditional security measures and often remain undetected for long periods.

Controls :

Endpoint Detection and Response (EDR) Solutions: EDR solutions are designed to detect and respond to advanced threats on endpoints, such as desktops, laptops, and servers. These solutions employ behavioral analysis, machine learning, and threat intelligence to identify malicious activities and anomalies. EDR solutions can detect and prevent attacks that bypass traditional security measures and provide timely incident response capabilities.
Implementing network segmentation involves dividing a network into smaller, isolated segments or subnetworks. By creating logical barriers and employing strict access controls and traffic filtering mechanisms, organizations can significantly impede the lateral movement of attackers within their networks. This approach restricts unauthorized access to critical systems and data, minimizing the potential impact of a breach and preventing attackers from easily navigating through the entire network.

RISK : Insider threats
Employees with access to the bank's systems and networks may intentionally or unintentionally cause harm to the bank's information security posture.

Controls :

Access Controls and User Permissions: Implementing strong access controls and user permissions is crucial to mitigate the risk. This involves granting employees access to systems and networks based on the principle of least privilege, ensuring they only have access to the resources necessary for their roles. Regularly reviewing and updating access rights and promptly revoking access upon termination or role changes is also essential.
Security Awareness and Training: Educating employees about information security risks, best practices, and policies is vital.

RISK : Malware and viruses
Malicious software can be introduced into the bank's systems and networks, causing damage to data, systems, or networks.

Controls :

Application Whitelisting: This control is the most effective in mitigating the risk of malicious software. It involves allowing only authorized applications to run on the bank's systems and networks. This control blocks any unauthorized software from executing, which reduces the risk of malware infections.
Patch Management: Keeping all software up to date and applying security patches promptly is essential in mitigating the risk of malware infections. Regular patch management ensures that known vulnerabilities are addressed, reducing the likelihood of a successful malware attack.

RISK : Social engineering attacks
Cybercriminals may use social engineering tactics to deceive employees into providing sensitive information or to gain unauthorized access to the bank's systems.

Controls :

Access Control: Limiting access to sensitive information and critical systems to authorized personnel through the implementation of strong authentication and authorization measures can significantly reduce the likelihood of unauthorized access.
Employee Education and Training: Providing comprehensive and ongoing training to employees on how to identify and avoid social engineering tactics is the most effective control to mitigate this risk.
Multi-Factor Authentication (MFA): Enforcing MFA across all access points and systems can provide an additional layer of security against unauthorized access by requiring employees to authenticate themselves using multiple factors.