FFIEC Compliance Framework

What is the FFIEC Compliance Framework?

The Federal Financial Institutions Inspection Council (FFIEC) is a structured interagency body made up of five banking regulators who are in charge of the US federal government's audits of financial institutions. It makes proposals to keep financial institutions governed uniformly at the federal level. IT Test Handbooks are issued by the FFIEC Examiner Education Office for field examiners from FFIEC member agencies.

The FFIEC establishes uniform reporting mechanisms for federally regulated banks and financial institutions, their holding companies, and their non-financial subsidiaries. The FFIEC acts as a training ground for examiners who work for the council's member agencies. Employees of the state may also engage in these training programs.

The main entity forms responsible for following the FFIEC guidelines are federally regulated financial institutions. If you are connected to that entity in some way, such as as a holding company or a nonfinancial subsidiary, you must also comply with these provisions.

What are the requirements for FFIEC?

Meeting FFIEC compliance requires regular comprehensive assessments to identify potential security weaknesses or threats. The FFIEC’s Cybersecurity Assessment Tool can be used as a framework for internal assessments and gives regulators a view of the organization’s cybersecurity practices. Following an FFIEC audit, appropriate goals and solutions must be put in place.

FFIEC covers 11 topics:

The FFIEC IT Handbook Infobase provides a variety of resources for information technology guidelines, ranging from IT booklets and work programs to information on laws, regulations, and guidance. Financial institutions can use these compliance assets to ensure that they are in compliance with the FFIEC's cybersecurity guidelines.

The IT Handbook InfoBase provides organizations with a wide range of cybersecurity resources that they can use in their businesses. The Infobase is made up of 11 booklets that cover topics relevant to your financial institution's operations.

Understanding all of these areas will allow you to implement consistent practices that will allow you to operate as a federally supervised financial institution without incurring fines or other penalties.

 

  • Business Continuity Planning: How does your company prepare for disruptions caused by natural disasters, hardware failures, cyber attacks, and other incidents that threaten business continuity? To get things up and running quickly, you need a solid plan in place, as well as the necessary supporting systems.

  • Development and Acquisition: Do you understand the risks associated with business development and acquisition? A poorly managed acquisition could lead to a slew of problems with uniform practices and cyber security.

  • Electronic Banking: Because consumers expect electronic banking services from their financial institutions, your organization must keep this process safe and secure to reduce the risk of financial data theft.

  • Information Security: Do your cybersecurity measures adequately address the types of attacks that financial institutions face? Cybercriminals operate in an ever-changing landscape, so your defenses must keep up.

  • IT Audit: What types of auditing practices and procedures does your financial institution have in place? Continuous evaluation is essential for continuously improving your operations and ensuring compliance with all relevant regulations. Today's cyber threat environment may look very different in five years.

  • IT Governance: Your current IT governance policies must be centered on meeting the regulatory requirements expected of your type of financial institution.

  • Operations: Risk management and mitigation are important procedures to have in place so that you can address cyber attacks and other threats proactively.

  • Outsourcing Technology Services: Do your outsourcing partners adhere to the same uniform standards and cybersecurity protocols as your financial institution?

  • Retail Payment Systems: Recognize the threats that exist in a retail payment environment, such as a lack of physical security measures.

  • Supervision of Technology Service Providers: You must supervise any third-party service providers with whom you are working and adhere strictly to the recommended guidelines when selecting these partners.

  • Wholesale Payment Systems: Because these systems handle high-value payments, it is critical to examine your practices separately for this type of system.

Why should you be FFIEC compliant? 

 

Failure to follow the FFIEC's guidelines may result in financial penalties. Because the FFIEC is an interagency body that makes recommendations, it lacks the mandate and authority to impose direct monetary sanctions. However, because its members are federal agencies with the authority to levy fines, failing to follow FFIEC guidelines can result in a financial penalty of up to $2 million. This amount, however, could be significantly higher if the organization is sued in federal court for violating banking regulations.

 

How to achieve FFIEC compliance?

 

To meet FFIEC compliance, a financial institution must adhere to a set of technology standards for online banking issued by the FFIEC in October 2005. Enterprises that must comply with these guidelines must conduct comprehensive assessments of their internal environments on a regular basis. The primary goal of these compliance audits is to identify any potential security flaws or threats. To maintain an adequate level of security after completing an FFIEC assessment, the organization must set goals, identify solutions, and continue to conduct periodic risk review exercises.

Financial institutions that must follow the FFIEC's guidelines must understand and implement the requirements and recommendations published in the various InfoBases. Complying with the various FFIEC guidelines necessitates a comprehensive I.T. security policy that includes policies and procedures.

Using the Centraleyes platform you can manage and review your FFIEC compliance starting with assessing the institution’s inherent risk profile based on five categories:​​

  1. Technologies and Connection Types

  2. Delivery Channels

  3. Online/Mobile Products and Technology Services

  4. Organizational Characteristics

  5. External Threats Management​

Then the platform guides you through the second phase of evaluating the institution’s cyber security maturity level for each of five domains:​

  1. Cyber Risk Management and Oversight

  2. Threat Intelligence and Collaboration

  3. Cyber security Controls

  4. External Dependency Management

  5. Cyber Incident Management and Resilience​

Centraleyes delivers streamlined, automated data collection and analysis, prioritized remediation guidance and real-time customized scoring to meet the FFIEC requirements. Centraleyes has mapped FFIEC back to its control inventory allowing to share data across multiple frameworks through the platform, which creates time savings, money savings and more accurate data. Through the Centraleyes  platform organizations can gain full visibility to their cyber risk levels and compliance.