IT Security Audit: Requirements, Threats & Precautions in Banks

As cyber threats have been increasing these days, in a response, IT audit banking units have set an expectation for internal security audit to understand the changes and perform an independent audit and assessment of banking capabilities to manage risk associated factors. The required initiatives to ensure successful implementation of internal auditing is conduction of an IT risk assessment and distill the evidence into precise notes or reports for an auditing committee. It helps the banking sector to make a multidimensional internal audit plan on the basis of risk factors and findings figured out from the report. 

To understand the necessity of IT auditing in banking, initially it is essential to understand the IT security issues, threats and vulnerabilities, & also the ways to perform a security assessment to gather the information about those vulnerabilities. 

Requirements of IT Audit in Banking

Financial institutions like small to large sized commercial banks have been facing common cyber attacks, threats and issues in their day-to-day financial operations. An auditing can be anything from full-scale analysis of business practices to sysadmin log files monitoring. The scope and requirements of IT auditing is based on the functions and goals of organization to organization. The basic approach of performing an IT security audit is to gather information about targeted organization, research vulnerabilities level, breaches of cyber security and protocols, alerts systems, testing the confirmed exposures and perform a risk analysis report in a precise manner for the audit committee. 

All activities and operations required to ensure data security including system security, application security, physical security, network security, IT risk management, project management, Information security, infrastructure security management, disaster recovery, cloud monitoring and data backup and storage recovery, hardware and software usage management, intellectual property rights and risk management etc. 

IT auditing security is also known as information security. It is a concept of executing KPIs, implementing security measures and designing systems to secure and safeguard information and data of the organization. Data backup and security includes organization personal data, employee data, voice conversations, still images, videos, motions pictures, multimedia presentations, etc. 
As entire banking transactions and operations are related to physical or virtual financial transactions, IT audit and security becomes required to protect created, stored, exchanged and accessed data and information from one to one or multiple authorized-unauthorized systems and applications. IT security and audit plans allow the banking sector to deploy authenticated plans to develop strict protocols and implement it to identify malfunctions, modification, destruction, inappropriate disclosure that may preserve financial values, confidentiality, integrity, availability or fraudulent use to perform their permitted critical functions.  

IT Threats in Banking Institutions

Internet Usage

The appearance of internet usage over the last few years has proved to be more incredible for our daily lives, but on the other hand, it has been possessing some potential threats to security, too. When multiple electronics devices, systems and applications are integrated with each other to give off a constant stream of data, it helps emerging new threats and cyber attacks in the banking industry. As the internet has become available publicly, the banking sector has forgotten to pay proper attention to the process of data transmission, assessment and implementation. IT auditing and security processes become necessary to ensure that the encryption of sensitive information is completed and accessed properly or not. 

Ransomware

Ransomware Trojans activities are being increased these days especially in the financial sector, it is a kind of cyberware that is designed to extort money from a victim. Often they demand payments in order to undo the changes made by trojan viruses to the victim’s system. These changes could be related to first; encryption data that are stored on the victim’s computer, so that they cannot access their system. Secondly, blocking normal access to the victim’s system.

When any of the banking employees gets phishing mails; as a result of visiting a website that gathers malicious programs and coding which increase the impact of ransomware trojan virus installation. These kinds of attacks encrypt the data and make it unusable until the victim pays the ransom. Hiring an IT auditor can help banks to identify malicious activities and ways by performing regular backup routines and implementing real-time security measures and records.

Other vulnerabilities

●Spear phishing - Spear phishing is an email or electronic communications scam targeted towards a specific individual and banking sector to steal data for malicious intent, cyber fraudulent activities etc. Cyber criminals intend to install malicious apps or links or the targeted systems for this.
●Vulnerability - It is a system susceptibility or flaw. Vulnerabilities are documented in the common vulnerability and exposures (CVE) database. An exploitable vulnerability is one for which at least one working attack or exploit exists. 

IT Audit & Precautions

Information security audit is the process of collecting and evaluating evidence to access and determine whether a computer system has been developed to maintain data security, integrity, effectiveness, safeguards assets, allows banking objectives to be fulfilled and proper allocation of resources. An effective IT audit system can lead banking organizations to achieve their objectives and goals and with strong protocol implementation, it also assists them to minimize additional risk while allocating resources, transferring data with various system integration, etc. 

Also, the objectives of implementing an IT audit within the banking organization is to evaluate the banks’ compliance and effectiveness of computerized information systems (CIS) is order to ascertain whether the CIS produces timely, accurate, complete and reliability of data and ensure the legal and regulatory banking requirements.