An internet banking audit focuses on ensuring the security,

reliability, and compliance of online banking systems. Here’s a

detailed audit checklist to assess various components of internet
banking:

### 1. **Access Control and Authentication**

- **Multi-Factor Authentication (MFA)**: Verify if MFA is
implemented for both customer logins and internal administrative
access.
- **Password Policies**: Ensure strong password policies
(complexity, expiration, and history) are enforced for both
customers and employees.
- **Session Management**: Check session timeouts, automatic
logouts, and session tracking to avoid hijacking.
- **Account Lockout**: Confirm that account lockout
mechanisms exist after repeated failed login attempts to prevent
brute-force attacks.
- **Role-Based Access Control (RBAC)**: Verify that different
user roles (customers, admins, tellers) have appropriate
permissions and access.

### 2. **Data Security and Encryption**

- **TLS/SSL**: Ensure all communications between clients and
servers are encrypted using up-to-date TLS/SSL protocols.
- **Encryption of Sensitive Data**: Validate encryption of
sensitive customer data both in transit and at rest (e.g., account
numbers, personal info, transaction data).
- **Data Masking**: Confirm that sensitive information like
account numbers or card details is masked in UI displays and
reports.
- **Key Management**: Ensure proper key management
practices for encryption keys (e.g., using HSMs or AWS KMS) and
verify rotation policies.

### 3. **Application Security**

- **Vulnerability Assessments**: Ensure regular vulnerability
scans and penetration testing are conducted on the internet
banking platform.
- **Patch Management**: Review patch management
procedures to ensure timely application of software updates and
patches.
- **Application Firewall**: Verify if Web Application Firewalls
(WAF) are implemented to prevent SQL injections, cross-site
scripting (XSS), and other web-based attacks.
- **Secure Coding Practices**: Ensure secure coding standards
are followed to mitigate OWASP Top 10 vulnerabilities (e.g., input
validation, XSS protection).
- **API Security**: If APIs are used, confirm that API endpoints
are secure, protected by proper authentication and rate limiting,
and encrypted in transit.

### 4. **Transaction Monitoring and Fraud Detection**

- **Real-Time Monitoring**: Check for real-time monitoring of
transactions to detect anomalies or potential fraud.
- **Fraud Detection Systems**: Ensure that automated fraud
detection systems are in place (e.g., monitoring for unusual login
times, IP addresses, high-value transactions).
- **Transaction Limits**: Verify that transaction limits are set per
user role (e.g., daily withdrawal or transfer limits for customers).
- **Alerts and Notifications**: Confirm that customers receive
alerts/notifications (email/SMS) for critical account activities (e.g.,
password changes, large transactions).

### 5. **Compliance with Regulations**

- **Regulatory Compliance**: Ensure compliance with relevant
laws such as GDPR, PCI DSS, and local banking regulations.
- **Audit Trails**: Confirm that the system logs all critical actions
(logins, transactions, configuration changes) for future audits and
investigations.
- **Data Privacy**: Verify data privacy policies are in place and
customer consent is recorded and respected for data usage.
- **KYC/AML Compliance**: Ensure Know Your Customer (KYC)
and Anti-Money Laundering (AML) policies are implemented
effectively within the banking system.

### 6. **Infrastructure and Network Security**

- **Firewalls**: Review the configuration of network firewalls and
confirm that only necessary ports are open.
 - **Intrusion Detection/Prevention (IDS/IPS)**: Ensure that
IDS/IPS systems are in place to detect and mitigate network-
based attacks.
- **DDoS Protection**: Check that Distributed Denial of Service
(DDoS) mitigation techniques are employed, such as using AWS
Shield or Cloudflare.
- **Server Hardening**: Ensure that the internet banking servers
are hardened with secure configurations (e.g., disabling
unnecessary services, implementing least-privilege access).
- **VPN and Remote Access**: Verify that remote access to
banking infrastructure is secured through VPNs with proper
encryption and access control.

### 7. **Backup and Disaster Recovery**

- **Backup Policies**: Ensure that regular backups of customer
data, transaction logs, and system configurations are performed.
- **Data Replication**: Verify that critical data is replicated to
secondary data centers for disaster recovery.
- **Disaster Recovery Plan (DRP)**: Review the disaster
recovery plan, including Recovery Time Objective (RTO) and
Recovery Point Objective (RPO) for critical banking systems.
- **Business Continuity Plan (BCP)**: Ensure a Business
Continuity Plan exists and has been tested for critical internet
banking services.

### 8. **Logging and Monitoring**

- **Comprehensive Logging**: Ensure logging of user activity,
system events, and errors, including failed login attempts,
transaction errors, and system changes.
- **Log Retention Policies**: Confirm that logs are retained
according to legal and business requirements.
- **Security Information and Event Management (SIEM)**: Verify
that a SIEM system is implemented for real-time analysis of
security alerts generated by applications and network hardware.
- **Log Integrity**: Ensure that logs are protected from
unauthorized access and tampering.

### 9. **Customer Data Protection**

- **Data Retention**: Ensure customer data retention and
deletion policies comply with legal and business requirements.
- **Personal Identifiable Information (PII) Security**: Confirm
that PII is stored securely and access is restricted to authorized
personnel only.
- **Consent and Notification**: Verify that customer consent is
obtained for data collection and processing, and ensure that
customers are notified of data breaches.
- **Data Anonymization**: Ensure that PII is anonymized where
necessary to protect customer privacy.

### 10. **Third-Party Vendor Management**

- **Vendor Risk Assessment**: Perform due diligence on third-
party vendors handling sensitive banking operations (e.g.,
payment processors, cloud service providers).
- **Contractual Security Requirements**: Ensure that vendors
meet contractual security and compliance requirements, such as
PCI DSS certification.
- **Third-Party Audits**: Ensure regular security audits and
assessments are performed on third-party vendors.

### 11. **User Education and Support**

- **Customer Awareness Programs**: Review programs to
educate customers about phishing, account protection, and online
fraud prevention.
- **Customer Support Security**: Verify secure customer
support channels for handling account-related issues (e.g., secure
password reset procedures).
- **Incident Response for Phishing and Fraud**: Ensure a well-
documented and tested incident response plan is in place to
handle customer complaints related to phishing or fraud.

### 12. **Incident Response and Handling**

- **Incident Response Plan**: Confirm the existence of an
incident response plan for security breaches, fraud, or system
failures.
- **Response Time SLAs**: Ensure service-level agreements
(SLAs) are in place for the response to and resolution of incidents.
- **Forensic Readiness**: Validate that forensic capabilities are
established to investigate incidents and gather evidence.
 - **Customer Notification**: Ensure protocols are in place to
notify customers of security incidents and remediation steps.

### 13. **Performance and Availability**

- **Uptime Monitoring**: Ensure uptime monitoring of internet
banking services to meet service availability SLAs.
- **Scalability Testing**: Check if the system is tested regularly
for scalability and load management, especially during peak
times.
- **Latency Monitoring**: Ensure that the performance of
internet banking services is monitored, including page load times,
transaction processing speed, etc.

### 14. **Change Management**

- **Change Control Process**: Review the change control
processes for deploying new features or patches to internet
banking services.
- **Testing and Validation**: Ensure thorough testing (unit,
integration, user acceptance) before deployment to production.
- **Roll-Back Plan**: Verify that a rollback plan exists in case of
failure during updates or patching.

### 15. **Mobile Banking Security**

- **App Security**: Ensure that mobile banking applications are
subject to security reviews, including secure coding practices and
vulnerability testing.
- **Device Authentication**: Confirm that mobile applications
enforce device authentication and encrypt all communications.
- **Mobile Malware Protection**: Check if mobile apps are
protected against malware, including the use of application
integrity checks and detection of rooted/jailbroken devices.

By following this checklist, you can ensure that your internet

banking platform remains secure, compliant, and efficient,
protecting both the financial institution and its customers from
potential threats and vulnerabilities.