From Compliance to Confidence

Building a Risk-Based Information Security Program for Community Banks

For many community banks, passing a regulatory exam can feel like a victory lap. You've checked the boxes, documented your controls, and avoided any major findings. But here’s the uncomfortable truth: passing an exam doesn’t mean your bank is secure.

As cyber threats evolve, it’s no longer enough to treat information security as a compliance exercise. Today’s risk environment demands a risk-based approach—one that aligns security decisions with your bank’s specific vulnerabilities, business goals, and threat landscape.

Let’s break down what this shift looks like and how your bank can take practical steps to move from compliance to confidence.

Compliance Isn’t the Enemy—But It’s Not the Goal

A compliance-only approach typically looks like this:
- Security is driven by the audit calendar.
- Controls are implemented because an examiner said to, not because they’re the right fit.
- Cybersecurity is a checklist, not a strategy.

The problem? Compliance doesn’t equal protection.
Cybercriminals aren’t waiting for your next exam—they’re targeting weaknesses in real time. And for many community banks, a single breach can result in serious reputational damage and financial loss.

What Is a Risk-Based Security Program?

A risk-based approach starts by asking different questions:
- “What are our most critical systems and services?”
- “What could go wrong?”
- “How likely is that risk—and how much would it hurt?”

Instead of focusing on whether you have a control in place, a risk-based program evaluates whether that control is adequate and appropriate for the actual threats you face. It prioritizes mitigation efforts based on likelihood and impact, not regulatory line items.

5 Steps to Build a Risk-Based Program

1. Map Business Goals to Cyber Risk
   Think of your core services: lending, online banking, ACH processing. What would happen if those systems went down, were breached, or manipulated?
   
   Frame risk in business terms: “If online banking is unavailable for 48 hours, what’s the customer and reputational impact?”
2. Conduct (at minimum) a Simplified Risk Assessment
   You don’t need to boil the ocean. Start with your top 10–15 systems or processes. For each, ask:
   • What threats exist?
   • How vulnerable are we?
   • What’s the potential impact?
     
   
   Use this to guide control decisions—whether that means upgrading endpoint protection or tightening access to sensitive systems.
3. Build and Maintain a Risk Register
   A risk register doesn’t need to be complex. A simple spreadsheet with the following columns is enough:
   • Risk description
   • Likelihood
   • Impact
   • Risk score
   • Owner
   • Mitigation status
   
   This helps you track progress, assign responsibility, and justify decisions—especially during audits. Start simple and enhance as you go.
4. Prioritize Based on Actual Risk
   Just because something is flagged in InTREx or the FFIEC CAT (or whatever framework you’ve chosen to replace the CAT) doesn’t mean it’s your most pressing issue.
   
   If you have 100 open findings, but five could lead to ransomware or account takeover, focus there. Let risk—not checklists—drive your roadmap.
5. Report in Plain English
   Boards and executives don’t speak in acronyms like MFA, SIEM, or EDR.
   Translate security into business impact:
   • “We reduced the risk of credential theft by enforcing MFA across all staff.”
   • “We conducted a ransomware tabletop to improve recovery time and communication readiness.”

From Awareness to Accountability

When risk becomes part of regular conversation, it becomes everyone’s responsibility:
- Departments own their systems and related risks.
- Reviews and assessments happen proactively, not reactively.
- Security decisions align with business planning—not just exam prep.

Over time, this builds resilience, not just compliance.

Helpful Tools and Resources

• NIST Cybersecurity Framework (CSF) – Great for mapping risk to controls
• InTREx Core – Identify examination expectations, but assess how they apply to your environment.
• CRI Profile
• Cyber insurance questionnaires – A good proxy for evaluating current security posture.
  
  

Final Thoughts

Regulatory compliance is important—but it’s the floor, not the ceiling.

By focusing on actual risks to your business, your bank can shift from a defensive, reactive posture to a strategic, resilient one.

✅ You’ll be more secure.
✅ You’ll pass exams with less friction.
✅ And you’ll build trust—with regulators, customers, and your board.

Being compliant is good. But being confident is better.