Year-End Risk Review Checklist for Financial Institutions

Before year-end, make sure your IT controls, cybersecurity defenses, and vendor oversight are keeping pace with risk. Use this checklist to identify gaps and strengthen readiness. 

By: Lindsey Hull, SBSCyberSecurity
​
Year-end planning gives financial institution leaders an opportunity to look ahead, but it should also include a clear-eyed review of what remains unfinished. Before budgets reset and attention shifts to next year's priorities, banks and credit unions should know whether their controls have been independently evaluated, their technical defenses have been tested, and their vendor management program reflects their current third-party risk.

An IT audit, network security assessment, and vendor management review answer different questions. Together, they can provide a more complete view of the governance, technical, and third-party risks surrounding your institution. 

If one or more of these activities is still outstanding, the checklist can help you identify what needs attention, who should be involved, and what should be addressed before year-end.
 
Prove It: Have You Independently Validated Your IT Controls?
Policies, procedures, and internal risk assessments are important, but documentation alone does not establish that controls are designed appropriately or operating as intended. Independent validation can help leadership understand whether the institution's information technology and information security practices align with its risk profile, applicable guidance, and internal expectations.

An IT audit evaluates the governance and controls surrounding the institution's technology environment. Depending on the scope, it may examine areas such as information security governance, access management, change management, business continuity, incident response, technology operations, and vendor oversight.

The most useful audit does more than identify findings. It gives management practical insight into what is working, where controls may need attention, and which improvements should be prioritized.

Before year-end, ask:

• Has our IT environment received the independent audit coverage required by our risk-based audit plan?
• Did the audit scope reflect changes to our systems, services, vendors, and operations?
• Have findings and recommendations been assigned to accountable owners?
• Can management clearly explain the status of remediation to the board or appropriate committee?
• Are there unresolved issues that will follow us into the new year?

 
Prove it. Make sure the confidence you have in your controls is supported by current evidence.
 
Test It: Have You Evaluated Your Technical Defenses?

An IT audit and a network security assessment are complementary, but they are not interchangeable. An audit evaluates governance and controls. A network security assessment examines technical defenses and looks for weaknesses within the environment.

That distinction matters. A policy may require secure configurations, timely patching, restricted access, and network segmentation. Technical testing helps determine whether those expectations are reflected in the systems and devices within scope.

Depending on the engagement, network security testing may include vulnerability scanning, penetration testing, configuration reviews, and other methods selected according to the institution's environment and objectives. The results can help technology and security teams prioritize remediation, while giving executives and risk leaders clearer context for decisions about resources and residual risk.

Before year-end, ask:

• Has our current network environment been independently assessed?
• Did the scope account for material changes made during the year?
• Were findings validated and prioritized according to risk?
• Are remediation responsibilities and target dates documented?
• Do leaders understand the business implications of the most significant technical weaknesses?

 
Test it. Confirm that the controls described on paper are supported by the way your environment is configured and protected.
 
Check It: Does Your Vendor Oversight Reflect Your Current Risk?

Financial institutions rely on third parties for technology, data processing, operations, communications, and other important functions. The institution may outsource an activity, but it retains responsibility for overseeing the risks associated with that relationship.

A vendor management review can evaluate whether the institution's program provides an effective, risk-based approach to vendor selection, due diligence, ongoing monitoring, reporting, and issue tracking. It can also help identify whether staff are applying the program consistently across the institution's vendor population.

The review should go beyond confirming that documents were collected. Leadership needs to know whether critical vendors are properly identified, due diligence is proportionate to risk, concerns are escalated, and management has meaningful information for decision-making.

Before year-end, ask:

• Are vendors classified according to the risk and criticality of the products or services they provide?
• Have critical and higher-risk vendors received the appropriate level of review?
• Are missing documents, exceptions, and other concerns being tracked to resolution?
• Does management reporting identify which vendor relationships require attention?
• Does our program account for subcontractors and other dependencies that could affect operations or data?

 
Check it. Make sure vendor oversight reflects how your institution operates today, not how it operated when the relationship began.
 
Bonus Question: Has AI Changed What You Need to Review?

Artificial intelligence may already affect your institution even if it has not formally launched an AI initiative. Vendors may introduce AI-enabled functionality into existing products, employees may use approved or unapproved AI tools, and new capabilities may change how information is stored, accessed, processed, or shared.

This does not mean AI needs to become the focus of every audit or assessment. It does mean your institution should consider whether AI has changed the environment being evaluated.

Questions to raise with your internal team and assessment providers include:

• Have new or existing vendors added AI functionality?
• Do vendor reviews address how AI systems use, retain, or share institutional data?
• Are AI tools and use cases included in relevant inventories and risk assessments?
• Have AI-related changes affected access, data flows, policies, or control responsibilities?
• Does the scope of planned audit or testing activity reflect those changes?

 
The goal is not to add AI to a checklist simply because it is a current topic. The goal is to avoid overlooking a material change in your technology or vendor environment.
 
Leave No Loose Ends Before the New Year

An IT audit, network security assessment, and vendor management review serve different purposes, but each helps answer an important year-end question:

• Prove it: Are our IT controls designed and operating as intended?
• Test it: Do our technical defenses perform as expected?
• Check it: Is our vendor oversight keeping pace with third-party risk?

 
You may not need to conduct all three activities at the same time. Your institution’s risk profile, audit plan, prior results, regulatory requirements, and material changes should guide your priorities. What matters is knowing what has been completed, what remains outstanding, and who owns the next step.

Ready to determine which activities need attention before the calendar turns? Schedule a year-end readiness discussion with SBS CyberSecurity.

Download the Year-End Risk Readiness Checklist for Financial Institutions to review your IT audit, network security, and vendor management priorities with your leadership team.

SBS CyberSecurity, LLC (SBS) is a top-rated consulting and audit firm. With over 20 years in the cybersecurity industry, SBS has provided solutions to thousands of regulated organizations across the United States and abroad. They offer dynamic solutions to help you build a proactive risk management program capable of withstanding the daily threats your organization faces. Their services are designed to assist you in making informed cybersecurity decisions to better protect your business. For more information please contact George McDonald.