IT GRC Best Practices: A CISO’s Practical Playbook

Banks, insurers, and Non-Banking Financial Companies (NBFCs) across India stand at the epicentre of a perfect regulatory storm. With the Reserve Bank of India's Master Direction on Information Technology Governance, Risk, Controls and Assurance Practices set for full implementation from April 2024, regulated entities face an inflection point: transform compliance burdens into strategic advantages or risk obsolescence in an increasingly unforgiving financial landscape.

The stark reality confronting Chief Information Security Officers (CISOs) transcends mere technical considerations. Between 2022 and 2023 alone, the banking and financial services sector witnessed a 138% surge in reported cyber incidents according to Indian Computer Emergency Response Team (CERT-In) data—a sobering reminder that sophisticated threat actors view financial institutions not as abstract targets but as prime hunting grounds for high-value exploits.

Against this backdrop, Information Technology Governance, Risk, and Compliance (IT GRC) ceases to function as a perfunctory checkbox exercise and emerges as the sine qua non of institutional legitimacy. The days of siloed security approaches and fragmented compliance initiatives have vanished, replaced by an imperative for integrated, board-level governance frameworks that simultaneously satisfy regulatory mandates and catalyse business resilience.

This blog presents a pragmatic playbook for CISOs navigating this complex terrain—transforming abstract regulatory directives into actionable strategies that not only ensure

compliance but elevate security posture, optimise resource allocation, and ultimately convert regulatory requirements into demonstrable competitive advantages.

1.   Understanding the RBI's IT GRC Regulatory Framework

The RBI's Master Direction on Information Technology Governance, Risk, Controls and Assurance Practices (issued in November 2023) represents a significant milestone in the regulatory landscape for financial institutions in India. These guidelines consolidate and strengthen previous instructions, establishing a more comprehensive governance framework for technology within the banking and financial services sector.

Key Components and Implications

1. Comprehensive IT Governance Framework: The directives mandate the establishment of a Board-level IT Strategy Committee (ITSC) and an IT Steering Committee at the senior management level. These committees are tasked with aligning IT initiatives with business objectives and ensuring adequate oversight of technology-related risks.
2. Defined Roles and Responsibilities: The guidelines articulate clear expectations for key stakeholders, including the Board, senior management, and specialised positions such as the Chief Information Security Officer (CISO). Notably, the CISO must be a senior-level executive independent from the IT function, report directly to the Executive Director or equivalent, and be a permanent invitee to the ITSC and IT Steering Committee.
3. Robust Risk Management: Regulated entities must implement a comprehensive IT and Information Security Risk Management Framework, conduct periodic risk assessments, and establish processes for vulnerability assessment and penetration testing. This emphasises a proactive approach to identifying and mitigating cyber threats.
4. Comprehensive Software and Application Management: The RBI directive mandates several critical requirements for software management:

• Maintenance of an enterprise data dictionary to enable sharing of data among applications and promote common understanding of data
• Ensuring that maintenance and necessary support of software applications is provided by the software vendors and enforced through formal agreement
• Obtaining source codes for all critical applications from vendors, or where not possible, implementing source code escrow arrangements or other mitigating measures
• Acquiring a certificate or written confirmation from application developers/vendors stating that applications are free of known vulnerabilities, malware, and covert channels—with such attestations required after any material changes to code, including upgrades

1. Security Controls and Operations: The directive specifies detailed requirements for operational controls:

• Cyber Incident Response and Recovery Management, including incident classification, assessment, clear communication strategy, and timely recovery procedures
• Information Systems (IS) Audit policy and processes with clear description of mandate, purpose, authority, and audit universe
• Data Migration Controls requiring documented policies for ensuring data integrity, completeness, and consistency during migrations
• Straight Through Processing (STP) controls to prevent unauthorized modification of data between processes or applications, with secure automation and proper integration

1. Disaster Recovery Management: The directive places significant emphasis on business continuity and disaster recovery:

• Mandatory DR drills for critical systems at least half-yearly (and for non-critical systems based on risk assessment)
• DR testing must involve complete switchover to DR/alternate sites for a full working day
• Requirement to prioritize minimal Recovery Time Objective (RTO) and near-zero Recovery Point Objective (RPO) for critical systems
• Documented methodology for data reconciliation in scenarios with non-zero RPO
• Identical configurations and security patches at both DC and DR sites
• Verification of BCP and DR capabilities in interconnected critical systems

1. IT Outsourcing Governance: The directive makes explicit reference to the Reserve Bank of India (Outsourcing of Information Technology Services) Directions, 2023, emphasising that organizations must implement appropriate vendor risk assessment processes and controls for any third-party arrangements not within the applicability of the IT Outsourcing directive. This highlights RBI's comprehensive approach to managing technology supply chain risks across the entire IT ecosystem.

These directives reflect the RBI's recognition of technology's pivotal role in the financial sector and the corresponding need for robust governance mechanisms to manage associated risks.

2.   Building Your IT GRC Strategy: The CISO's Playbook

A successful IT GRC strategy transcends mere compliance—it fosters a culture of security awareness, enhances operational efficiency, and enables informed decision-making. Here's a comprehensive approach for CISOs in the banking and financial services sector:

1. Establish a Governance Foundation Key Actions:

• Structure the Governance Framework: Establish the ITSC and IT Steering Committee with clear charters, meeting schedules, and reporting mechanisms. Ensure these bodies have the necessary authority and resources to fulfil their mandates.
• Define Clear Roles and Responsibilities: Document the roles, responsibilities, and authority of key stakeholders, including the Board, senior management, CISO, and IT teams. Implement a RACI (Responsible, Accountable, Consulted, Informed) matrix to avoid ambiguity.
• Develop Board-Level Engagement: Educate Board members on technology risks and opportunities, presenting information in business terms rather than technical jargon. Establish regular reporting mechanisms that provide actionable insights.

Implementation Guidance: Begin by conducting a gap analysis of your current governance structure against

RBI requirements. Use the S.U.P.E.R. framework from the CISO Playbook—Start-up,

Understand, Prioritise, Execute, Results—to develop and implement your

governance plan systematically.

2. Implement Robust Risk Management Practices Key Actions:

• Develop a Comprehensive Risk Framework: Establish a risk assessment methodology that aligns with industry standards (e.g., NIST Cybersecurity Framework, ISO 27001) while addressing RBI-specific requirements.
• Conduct Regular Risk Assessments: Implement a schedule for regular risk assessments, ensuring coverage of all critical systems and processes. Augment periodic assessments with continuous monitoring capabilities.
• Establish Risk Metrics and Reporting: Define key risk indicators (KRIs) that provide early warning of emerging threats. Develop dashboards and reporting mechanisms that translate technical risks into business impacts.

Implementation Guidance: Leverage the "zone defense" concept from the Open Source Cybersecurity Playbook by creating logical and physical separations between critical systems, implementing least privilege access controls, and establishing trust zones within your network. Remember that risk management is not a one-time activity—it requires continuous iteration and refinement.

3. Strengthen Vendor Management and IT Outsourcing Governance Key Actions:

• Implement Rigorous Vendor Assessment: Develop a comprehensive vendor risk assessment methodology that evaluates technical capabilities, security posture, and regulatory compliance. Incorporate controls to mitigate concentration risk and single points of failure.
• Align with RBI's IT Outsourcing Directive: Ensure vendor management practices align with the Reserve Bank of India (Outsourcing of Information Technology Services) Directions, 2023. This includes conducting comprehensive due diligence, establishing robust contractual frameworks, implementing continuous monitoring mechanisms, and developing exit strategies for each critical vendor relationship.
• Address Source Code and SBOM Requirements: For critical applications, negotiate appropriate access mechanisms as required by RBI guidelines. This may include obtaining source code directly, implementing escrow arrangements, acquiring Software Bills of Materials (SBOMs), or securing comprehensive vendor attestations regarding security. Ensure all arrangements include necessary components and are regularly validated.
• Maintain Enterprise Data Dictionary: Establish and maintain an enterprise data dictionary that enables consistent sharing of data among applications and systems, promoting a common understanding of data elements across the organisation.
• Monitor Vendor Performance: Establish ongoing monitoring processes to track vendor compliance with service level agreements (SLAs) and security requirements. Implement mechanisms for escalation and remediation of issues.

Implementation Guidance: Source code management represents a particularly challenging area for many CISOs. When negotiating with vendors, emphasise that arrangements for code access or escrow protect both parties—giving vendors a competitive advantage while providing your organisation with business continuity assurance. Consider engaging specialised escrow service providers who understand the financial sector's unique requirements.

When implementing the RBI's IT Outsourcing Directions, pay particular attention to the required governance structures. The directive mandates board-approved outsourcing policy, risk assessment frameworks, and comprehensive due diligence processes. Additionally, it requires specific contractual provisions addressing aspects like audit rights, subcontracting limitations, confidentiality, business continuity planning, and termination rights. The directive also emphasises the need for robust exit strategies that ensure business continuity during vendor transitions.

For enterprise data dictionaries, start with critical systems and expand outward. Assign clear ownership and governance mechanisms to ensure the dictionary remains accurate and up-to-date. For SBOMs, establish processes to regularly review them for outdated or vulnerable components, integrating this review with your vulnerability management program.

4. Implement Effective Compliance Management Key Actions:

• Map Regulatory Requirements: Create a comprehensive inventory of applicable regulations (RBI directives, IT Act, GDPR, etc.) and map them to specific controls and processes within your organisation.
• Establish Compliance Monitoring: Implement processes for continuous compliance monitoring, including automated controls where possible. Develop mechanisms for prompt identification and remediation of compliance gaps.
• Conduct Regular Audits and Assessments: Establish a schedule for Information Systems (IS) audits as required by RBI guidelines. Complement formal audits with self-assessments and mock regulatory examinations.

Implementation Guidance: Avoid treating compliance as a siloed activity. Instead, integrate compliance requirements into your broader risk management framework, ensuring that compliance considerations are embedded in system design, procurement, and operational processes. This approach not only enhances efficiency but also reduces the risk of compliance gaps.

5. Foster Security Awareness and Culture Key Actions:

• Develop Targeted Training Programs: Implement role-based security awareness training that addresses the specific risks faced by different functions within the organisation. Pay particular attention to senior management and the Board.
• Conduct Regular Simulations: Implement phishing simulations, tabletop exercises, and full-scale incident response drills to test organisational preparedness and reinforce security awareness.
• Recognise and Reward Security Consciousness: Establish mechanisms to recognise and reward security-conscious behaviour, creating positive reinforcement for security practices.

Implementation Guidance: Security awareness is not a one-time activity but a continuous process. Leverage diverse communication channels and formats to ensure that security messages reach all stakeholders. Monitor the effectiveness of awareness programs through metrics such as phishing simulation click rates, security incident reporting, and behavioural observations.

3.   Overcoming Common Challenges and Pitfalls

Despite the best intentions, many IT GRC initiatives falter due to common challenges. Here are strategies to address these obstacles:

Challenge 1: Stakeholder Resistance Solution:

• Articulate Business Value: Frame GRC initiatives in terms of business enablement rather than compliance mandates. Highlight how robust GRC practices can enhance reputation, build customer trust, and facilitate entry into new markets.
• Engage Early and Often: Involve key stakeholders in the planning and design phases of GRC initiatives, ensuring their perspectives are incorporated and their concerns addressed.
• Show, Don't Tell: Demonstrate the tangible benefits of GRC through pilot projects and early wins that showcase value without requiring immediate organisation-wide changes.

Challenge 2: Siloed Approaches Solution:

• Establish Cross-Functional Governance: Implement governance structures that span organisational silos, ensuring coordinated approaches to risk management and compliance.
• Leverage Technology Integrations: Implement GRC tools that integrate with operational systems, providing visibility and control without duplicating efforts.
• Foster Collaborative Culture: Promote a culture of information sharing and joint problem-solving across traditional boundaries. Recognise and reward collaborative behaviours.

Challenge 3: Resource Constraints Solution:

• Prioritise Based on Risk: Allocate limited resources based on rigorous risk assessment, focusing on high-impact, high-likelihood risks.
• Automate Where Possible: Leverage automation to enhance efficiency in routine GRC tasks, freeing up human resources for strategic activities.
• Build the Business Case: Develop robust business cases for GRC investments, highlighting both the direct costs of non-compliance (fines, penalties) and the indirect benefits of enhanced decision-making and operational resilience.

Challenge 4: Evolving Threat Landscape Solution:

• Implement Threat Intelligence: Establish processes for monitoring and analysing emerging threats, ensuring your risk management practices remain relevant.
• Embrace Adaptive Controls: Design security controls that can adapt to evolving threats without requiring complete redesign.
• Foster Continuous Learning: Encourage security teams to stay current with emerging threats and countermeasures through professional development, industry engagement, and formal training.

4.   Measuring Success: Key Metrics for IT GRC

To demonstrate the value of IT GRC initiatives and guide continuous improvement, CISOs should track relevant metrics across multiple dimensions:

1. Risk Metrics

• Risk Exposure: Measure the organisation's overall risk exposure, tracking trends over time and following risk remediation efforts.
• Control Effectiveness: Assess the effectiveness of security controls in mitigating identified risks, identifying gaps and areas for improvement.
• Risk Resolution Time: Track the time required to address identified risks, ensuring timely remediation of critical issues.

2. Compliance Metrics

• Compliance Status: Track the organisation's compliance with key regulatory requirements, identifying areas of non-compliance and remediation efforts.
• Audit Findings: Monitor the number and severity of audit findings over time, striving for continuous improvement.
• Regulatory Incidents: Track incidents that result in regulatory notification or intervention, analysing root causes and implementing preventive measures.

3. Operational Metrics

• Security Incidents: Monitor the frequency, severity, and impact of security incidents, analysing trends and implementing appropriate countermeasures.
• System Availability: Track the availability of critical systems, ensuring alignment with business continuity objectives.
• Mean Time to Detect/Respond/Recover: Measure the organisation's ability to identify, contain, and recover from security incidents, striving for continuous improvement.

4. Strategic Metrics

• GRC Maturity: Assess the organisation's GRC maturity against industry frameworks, tracking progress over time.
• Business Enablement: Measure how GRC initiatives enable business objectives, such as faster time-to-market for new products or entry into regulated markets.
• Stakeholder Satisfaction: Assess stakeholder satisfaction with GRC processes and outcomes through surveys and feedback mechanisms.

5.   Leveraging Technology for Enhanced GRC

While GRC is primarily about governance and processes, technology can significantly enhance the efficiency and effectiveness of GRC initiatives. CISOs should consider the following technology enablers:

1. GRC Platforms: Integrated GRC platforms can provide a unified view of risks, controls, and compliance obligations, enhancing visibility and coordination. When selecting a GRC platform, consider factors such as integration capabilities, reporting flexibility, and alignment with your organisation's specific requirements.

2. Security Automation: Automation can enhance efficiency in routine security tasks, allowing security teams to focus on strategic activities. Consider implementing automated vulnerability scanning, compliance monitoring, and control testing to improve both effectiveness and efficiency.

3. Advanced Analytics: Analytics capabilities can help identify patterns and anomalies that might indicate emerging risks or control failures. Consider implementing security information and event management (SIEM) solutions, user and entity behaviour analytics (UEBA), and other advanced monitoring capabilities.

4.Blockchain for Audit Trails: Blockchain technology can provide immutable audit trails for critical transactions and changes, enhancing accountability and facilitating compliance verification. Consider implementing blockchain-based solutions for critical records and audit logs.

6.   Final Thoughts/TL;DR

The RBI's IT GRC directives represent both a challenge and an opportunity for CISOs in the banking and financial services sector. Those who approach these requirements as merely a compliance exercise will miss the strategic potential of a robust GRC program.

By implementing the strategies outlined in this playbook, CISOs can transform IT GRC from a necessary burden into a strategic enabler that enhances decision-making, builds resilience, and creates sustainable competitive advantage. In a sector characterised by rapid change and intensifying competition, such transformation is not merely desirable—it's imperative.

Remember, the goal is not just to comply with regulatory requirements but to leverage those requirements as a foundation for building a more secure, resilient, and competitive organisation. By embracing this perspective, CISOs can position themselves not just as risk managers but as strategic partners in the organisation's journey toward digital transformation and market leadership.

The RBI's IT GRC directives mandate comprehensive governance structures, clear roles for CISOs, robust risk management, and business continuity planning for financial institutions. CISOs must establish strong governance foundations, implement rigorous risk and vendor management (including source code escrow for critical applications), foster security awareness, and measure success through relevant metrics. By transforming compliance into strategic enablement, CISOs can build resilient organisations that turn regulatory requirements into competitive advantages. Success requires overcoming stakeholder resistance, breaking down silos, managing resource constraints, and staying ahead of evolving threats—all while leveraging appropriate technology enablers.