A lesson in surveillance planning, risk reduction and bank safety for financial institutions, by Omar Valdemar, CPP, Banking & Financial Services Business Development Manager at Hanwha Vision America.
Banks and financial institutions have unique conditions that require equally unique security and surveillance solutions.
Money changes hands, sensitive information is shared, confidential plans are discussed.
These are only a few of the scenarios occurring in a banking and financial environment.
Security professionals in these industries therefore need intelligent video solutions that keep colleagues, clients and members safe and safeguard assets, intellectual property and private data.
It is crucial for a bank security program to have a solid risk management program in place because it helps identify, assess and mitigate potential risks and vulnerabilities that could impact the security of the bank’s assets and customer data.
A robust risk management program allows banks to proactively identify and analyze potential threats, such as cyber-attacks or fraud and implement appropriate controls and safeguards to minimize the impact and likelihood of these risks.
It also helps banks comply with regulatory requirements and maintain the trust and confidence of their customers by demonstrating a strong commitment to security and protecting their financial interests.
Ultimately, a good risk management program ensures the overall resilience and stability of the bank’s security program, safeguarding its reputation and preserving its long-term success.
In recent years, the Office of the Comptroller of the Currency (OCC) in the US has introduced Heightened Standards to ensure enterprise risk management programs are implemented at financial institutions.
When a financial institute grows to manage $50 billion in consolidated assets, it triggers the OCC Heightened Standards requirements.
Of course, it’s easier to make changes when a bank is smaller and nimble, and the overall risk is low.
Once significant growth begins occurring, configuring the right surveillance system gets more complicated with more considerations to evaluate.
One crucial aspect of these standards is implementing the Three Lines of Defense model.
This model helps banks strengthen their risk management practices.
The Three Lines of Defense model is a risk management framework that establishes clear responsibilities and accountabilities within an organization.
It delineates roles and functions across three lines, namely:
The implementation of the Three Lines of Defense model has several positive implications for bank safety and security programs at banks:
With the Three Lines of Defense model, financial institutions are better equipped to identify and assess potential risks related to bank safety and security.
The first line of defense, comprising front-line employees, is responsible for identifying risks and taking necessary measures to mitigate them promptly.
The second line of defense plays a critical role in overseeing bank safety and security programs.
They provide guidance and ensure appropriate controls are in place to manage risks effectively.
Compliance functions within the second line ensure adherence to regulations and industry best practices, strengthening security measures.
The third line of defense, consisting of internal auditors, provides independent assurance of the effectiveness of bank safety and security programs.
They conduct audits, evaluate controls and identify areas for improvement.
Their objective perspective ensures accountability and helps financial institutions continuously enhance bank safety and security measures.
By implementing the Three Lines of Defense model, banks can demonstrate a robust risk management framework to regulatory authorities.
Compliance with OCC Heightened Standards is essential for maintaining a secure banking environment and meeting regulatory requirements.
In the US, the top 45 banks meet this threshold, so most financial institutions may never have to implement Heightened Standards.
Organizations implement enterprise risk management programs with a mixed level of maturity.
Security practitioners should understand security risk assessments and bank/financial institution security professionals should understand the Heightened Standards framework and potentially build their programs to mature as their organization matures.
Bank security practitioners should consider the following:
The OCC Heightened Standards Three Lines of Defense framework can significantly impact bank safety and security programs at financial institutions.
By clarifying roles, responsibilities and accountabilities, this model enhances risk management practices, strengthens oversight and ensures regulatory compliance.
With the implementation of the Three Lines of Defense, banks can mitigate risks effectively, safeguard their operations and provide customers with a secure banking environment.
There’s no one-plan-fits-all approach for bank security and surveillance.
Financial institutions have unique risk profiles, are located in different geographic areas and vary in terms of the clients they support and services they offer.
Banks of all sizes must have baseline plans ready to deploy and meet any cybersecurity and physical security scenario.
Choosing the right type of surveillance system and the right type of surveillance solutions partner can be the right transaction for keeping employees, customers and data safe.
This article was originally published in the Special February Influencers Edition of Security Journal Americas. To read your FREE digital edition, click here.