R. Kinney Williams & Associates
R. Kinney Williams
& Associates

Internet Banking News

August 14, 2005

CONTENT Internet Compliance Information Systems Security
IT Security Question Internet Privacy Website for Penetration Testing


FYI - Banks Make Theft Easy for Phishers - Attackers take advantage of customer conveniences to create fake bank cards. U.S. banks are putting customer convenience ahead of security and, in the process, making it much easier for online "phishers" to create counterfeit bank cards.
http://www.pcworld.com/news/article/0,aid,122079,00.asp
http://news.com.com/2102-7349_3-5815141.html?tag=st.util.print

FYI - UK police want new computer powers - The UK Association of Chief Police Officers (ACPO) has called for new powers to allow police to tackle rogue websites, and make withholding encryption keys a criminal offence. http://www.techworld.com/security/news/index.cfm?NewsID=4106

FYI - One In Four Identity Theft Victims Never Fully Recover - Making things right after a stolen identity can take months and cost thousands, a survey of identity theft victims reported. Worse, in more than one in four cases, victims haven't been able to completely restore their good name.  http://www.techweb.com/wire/security/166402606

FYI - Whistle-Blower Faces FBI Probe - The FBI is investigating a computer security researcher for criminal conduct after he revealed that critical routers supporting the internet and many networks have a serious software flaw that could allow someone to crash or take control of them. http://www.wired.com/news/print/0,1294,68356,00.html

FYI - Remote Computer Security Enhances Virtual Private Network Safety - As more organizations take advantage of virtual private networks that facilitate remote access to corporate resources, internal auditors need to ensure organizations are taking the necessary steps to protect against external attacks. http://www.theiia.org/itaudit/index.cfm?fuseaction=forum&fid=5615

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WEB SITE COMPLIANCE -
Expedited Funds Availability Act (Regulation CC)

Generally, the rules pertaining to the duty of an institution to make deposited funds available for withdrawal apply in the electronic financial services environment. This includes rules on fund availability schedules, disclosure of policy, and payment of interest. Recently, the FRB published a commentary that clarifies requirements for providing certain written notices or disclosures to customers via electronic means. Specifically, the commentary to the regulations states that a financial institution satisfies the written exception hold notice requirement, and the commentary to the regulations states that a financial institution satisfies the general disclosure requirement by sending an electronic version that displays the text and is in a form that the customer may keep. However, the customer must agree to such means of delivery of notices and disclosures. Information is considered to be in a form that the customer may keep if, for example, it can be downloaded or printed by the customer. To reduce compliance risk, financial institutions should test their programs' ability to provide disclosures in a form that can be downloaded or printed. 

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INFORMATION TECHNOLOGY SECURITY
We begin our series on the FFIEC interagency Information Security BookletThis booklet is required reading for anyone involved in information systems security, such as the Network Administrator, Information Security Officer, members of the IS Steering Committee, and most important your outsourced network security consultants.  Your outsourced network security consultants can receive the "Internet Banking News" by completing the subscription for at https://yennik.com/newletter_page.htm.  There is no charge for the e-newsletter. 

SECURITY OBJECTIVES

Information security enables a financial institution to meet its business objectives by implementing business systems with due consideration of information technology (IT) -  related risks to the organization, business and trading partners, technology service providers, and customers. Organizations meet this goal by striving to accomplish the following objectives.

1)  Availability - The ongoing availability of systems addresses the processes, policies, and controls used to ensure authorized users have prompt access to information. This objective protects against intentional or accidental attempts to deny legitimate users access to information and/or systems.

2)  Integrity of Data or Systems - System and data integrity relate to the processes, policies, and controls used to ensure information has not been altered in an unauthorized manner and that systems are free from unauthorized manipulation that will compromise accuracy, completeness, and reliability.

3)  Confidentiality of Data or Systems - Confidentiality covers the processes, policies, and controls employed to protect information of customers and the institution against unauthorized access or use.

4)  Accountability - Clear accountability involves the processes, policies, and controls necessary to trace actions to their source. Accountability directly supports non-repudiation, deterrence, intrusion prevention, intrusion detection, recovery, and legal admissibility of records.

5)  Assurance - Assurance addresses the processes, policies, and controls used to develop confidence that technical and operational security measures work as intended. Assurance levels are part of the system design and include availability, integrity, confidentiality, and accountability. Assurance highlights the notion that secure systems provide the intended functionality while preventing undesired actions.

Appropriate security controls are necessary for financial institutions to challenge potential customer or user claims that they did not initiate a transaction. Financial institutions can accomplish this by achieving both integrity and accountability to produce what is known as non-repudiation. Non-repudiation occurs when the financial institution demonstrates that the originators who initiated the transaction are who they say they are, the recipient is the intended counter party, and no changes occurred in transit or storage. Non-repudiation can reduce fraud and promote the legal enforceability of electronic agreements and transactions. While non-repudiation is a goal and is conceptually clear, the manner in which non-repudiation can be achieved for electronic systems in a practical, legal sense may have to wait for further judicial clarification.

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IT SECURITY QUESTION: 
A. AUTHENTICATION AND ACCESS CONTROLS - Access Rights Administration

1. Evaluate the adequacy of policies and procedures for authentication and access controls to manage effectively the risks to the financial institution.

Evaluate the processes that management uses to define access rights and privileges (e.g., software and/or hardware systems access) and determine if they are based upon business need requirements.

Review processes that assign rights and privileges and ensure that they take into account and provide for adequate segregation of duties.

Determine if access rights are the minimum necessary for business purposes. If greater access rights are permitted, determine why the condition exists and identify any mitigating issues or compensating controls.


Ensure that access to operating systems is based on either a need-to-use or an event-by-event basis.


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INTERNET PRIVACY
- We continue our series listing the regulatory-privacy examination questions.  When you answer the question each week, you will help ensure compliance with the privacy regulations.

36. Does the institution use a reasonable means for delivering the notices, such as:

a. hand-delivery of a printed copy; [9(b)(1)(i)]

b. mailing a printed copy to the last known address of the consumer; [9(b)(1)(ii)]

c. for the consumer who conducts transactions electronically, clearly and conspicuously posting the notice on the institution's electronic site and requiring the consumer to acknowledge receipt as a necessary step to obtaining a financial product or service; [9(b)(1)(iii)] or 

d. for isolated transactions, such as ATM transactions, posting the notice on the screen and requiring the consumer to acknowledge receipt as a necessary step to obtaining the financial product or service? [9(b)(1)(iv)]

(Note: insufficient or unreasonable means of delivery include: exclusively oral notice, in person or by telephone; branch or office signs or generally published advertisements; and electronic mail to a customer who does not obtain products or services electronically. [9 (b)(2)(i) and (ii), and (d)])


VISTA - Does {custom4} need an affordable Internet security penetration-vulnerability test?  Our clients in 41 states rely on VISTA to ensure their IT security settings, as well as meeting the independent diagnostic test requirements of FDIC, OCC, OTS, FRB, and NCUA, which provides compliance with Gramm-Leach Bliley Act 501(b) The VISTA penetration study and Internet security test is an affordable-sophisticated process than goes far beyond the simple scanning of ports and testing focuses on a hacker's perspective, which will help you identify real-world weaknesses.  For more information, give Kinney Williams a call today at 806-798-7119 or visit http://www.internetbankingaudits.com/.

 

PLEASE NOTE:  Some of the above links may have expired, especially those from news organizations.  We may have a copy of the article, so please e-mail us at examiner@yennik.com if we can be of assistance.  

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