Updated FFIEC booklet focuses on ITRM

The FFIEC recently released an updated booklet in its Examination Handbook Series. The new "Management" booklet replaces the June 2004 version and explains how risk management is a component of governance and how IT Risk Management (ITRM) is a component of risk management. Financial institutions would be well-served to review the new booklet because examiners use booklet guidance to measure how well executive management understands, at a high level, IT risks faced by the institution, as well as the adequacy of ITRM processes.

Some key points of guidance for financial institution leadership to consider include:

  • IT supports most aspects of an institution's business, so ITRM should go beyond technology to include back-office operations for lines of business, network administration, systems development and acquisition, business continuity and resilience, and third-party management
  • ITRM not only contains costs and controls operational and cybersecurity risks, it also supports business strategies for sustained success
  • IT systems connect with affiliates, customers, third party providers and the public through interdependent infrastructure, applications, and Web content. Evolving technologies require on-going enhancements to existing systems and prompt new investment. ITRM addresses the new sources of risk that arise with this evolving technology.

Since boards of directors should approve the IT strategic plan, information security program, and other IT-related policies, they must understand IT activities and risks. Management is responsible for implementing a governance structure that provides appropriate oversight, assessments and processes for ITRM, including mitigating IT risks and providing for independent and comprehensive audit of IT controls.

Click here for more information and to view the updated IT Handbook for Management.

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