Enhancing Security in Financial Institutions

A PCI DSS Technical Audit Framework


In the BFSI (Banking, Financial Services, and Insurance) domain, conducting a comprehensive technical audit is essential to assess the architecture and identify potential risks. Each industry has its unique architectural implementations, but compliance with PCI DSS (Payment Card Industry Data Security Standard) is crucial for any organization handling payment transactions.

Banks manage multi-million-dollar transactions and issue credit and debit cards to account holders, while insurance companies handle millions of dollars in daily transactions. As business volume increases, so do the risks to financial information and customer data. Protecting this sensitive information is paramount.

This article delves into the core technical design aspects of financial institutions, aligning them with PCI DSS requirements. We will explore various assessments that can identify and mitigate risks, ensuring robust security and compliance.

Understanding PCI DSS and its Importance

PCI DSS is a set of security standards designed to ensure that all companies that process, store, or transmit credit card information maintain a secure environment. For BFSI organizations, compliance with PCI DSS is not just a regulatory requirement but a critical component of their overall security strategy.

Key Components of a Technical Audit

A technical audit involves a layered approach to thoroughly evaluate the architecture and pinpoint vulnerabilities. Below are the critical components to consider:

  1. Network Architecture Review

    Objective: To assess the design and implementation of the network infrastructure.

    Network Segmentation:

    This is the most important thing to validate in the architecture that whether the Cardholder Data Environment (CDE) is segmented from the DMZ zone and other network perimeters.

    1. Validate that a separate firewall has been installed to protect the CDE.
    2. Verify the management of firewall rules, ensuring that only necessary ports are allowed and that these rules are reviewed regularly.
    3. Ensure that default vendor credentials on firewalls and routers have been changed.
    4. Check network traffic to ensure that only authorized traffic flows between the CDE and non-CDE segments.
    5. Verify that data transfers between CDE and non-CDE segments are secure and encrypted as required.
    6. Ensure that IDPS are configured to detect and prevent unauthorized access attempts from non-CDE to CDE segments.
    7. Verify that internal IP addresses are disclosed only to authorized parties.
    8. Ensure that public-facing components, such as email, web servers, and DNS servers, are properly authorized and placed within a dedicated DMZ, separated by network security controls (NSCs).
    9. Verify webservers are isolated from application and database servers. Since web servers need to be directly connected to the internet.
    10. Verify the hardening process
    11. Does the CDE accesses are provided based on business need bases? How the access controls have been managed? How admin roles have been managed?
    12. Evaluate the deployment and effectiveness of IDS/IPS in detecting and mitigating potential threats.

    2. Data Protection

    Objective: To safeguard sensitive financial and customer information.

    • Confirm that data is encrypted both at rest and in transit using strong encryption methods.
    • Ensure that sensitive data is masked in non-production environments to prevent unauthorized access during development and testing.
    • Verify non console access facilitated by technologies are secured such as alternative access to systems, including but not limited to out of band (OOB), lights-out management (LOM), Intelligent Platform Management Interface (IPMI), and keyboard, video and mouse (KVM) switches with remote capabilities.
    • Validate the Wireless networks implementation methods, observe system admin administrator logging into wireless devices such as SNMP defaults are not used, default access point passwords not used.
    • Verify the wireless encryption keys are changed in accordance with all elements defined in PCI DSS
    •  Verify Sensitive Authentication Data (SAD) is not retained after authorization. The SAD authorization process completes when a merchant receives a transaction response (approval/ rejected).
    • Review the data sources to ensure that full contents of any track are not retained upon completion of the authorization process such as incoming transaction data, all logs, history files, trace files, DB Schemas, memory/ crash dump files.
    • Verify that all SAD that is stored electronically prior to completion of authorization is encrypted using strong cryptography.
    • Examine the audit logs including payment application logs, to verify the PAN is rendered unreadable.
    • Examine the inventory of trusted keys and certificates to verify it is kept up to date.
    • Examine the list of system components identified as not at risk of malware and compare to the system components without an anti-malware solution deployed.
    • Software Security
    • Verify that software securely uses external components functions (libraries, frameworks, APIs, etc).
      • Third-party library providing cryptographic functions is used, verify that it was integrated securely.
    • Verify the coding standards are aligned with OWASP Security controls.
    • Verify that software vulnerabilities are identified and managed in accordance with all elements specified in this requirement.
    • Verify that the automated technical solution(s) is installed in accordance with all elements of this requirement specific to the solution(s).
      • Automated technical solution that detects and prevents web-based attacks for public facing web application
    • Verify the payment page that does not load additional external script.
      • Ensure that scripts have been explicitly authorized and reduces the probability of unnecessary scripts being added to the payment page without appropriate validations.
      • Restrict the location that the payment page can be loaded from, using parent page content security policy (CSP) can substituted for the payment page.

    3. Access Control

      Objective: To ensure that access to sensitive data is restricted to authorized personnel only.

      • Review RBAC to ensure users have access only to the data necessary for their roles.
      • Verify the implementation of MFA to add an extra layer of security for accessing sensitive systems.
      • Ensure that access logs are maintained, monitored, and regularly reviewed to detect and respond to unauthorized access attempts.
      • Risk Assessment and Management

      Objective: To identify, evaluate, and mitigate risks associated with the organization’s information systems.

      • Vulnerability Scanning and Penetration Testing: Perform regular scans and tests to identify and address security weaknesses.
      • Incident Response Plan: Ensure there is a comprehensive incident response plan in place that is regularly tested and updated.
      • Aligning with PCI DSS Requirements

      To achieve PCI DSS compliance, BFSI organizations must align their technical infrastructure with the following key requirements:

      1. Build and Maintain a Secure Network and Systems
        1. Install and maintain a firewall configuration to protect cardholder data.
        1. Do not use vendor-supplied defaults for system passwords and other security parameters.
      2. Protect Cardholder Data
        1. Protect stored cardholder data.
        1. Encrypt transmission of cardholder data across open, public networks.
      3. Maintain a Vulnerability Management Program
        1. Protect all systems against malware and regularly update anti-virus software or programs.
        1. Develop and maintain secure systems and applications.
      4. Implement Strong Access Control Measures
        1. Restrict access to cardholder data by business need-to-know.
        1. Identify and authenticate access to system components.
        1. Restrict physical access to cardholder data.
      5. Regularly Monitor and Test Networks
        1. Track and monitor all access to network resources and cardholder data.
        1. Regularly test security systems and processes.
      6. Maintain an Information Security Policy
        1. Maintain a policy that addresses information security for employees and contractors.


      In the BFSI sector, safeguarding sensitive financial and customer data is of paramount importance. Conducting a thorough technical audit aligned with PCI DSS requirements is essential for identifying and mitigating risks, ensuring compliance, and protecting the organization’s reputation. By implementing robust data protection measures, access controls, and regular risk assessments, financial institutions can build a secure foundation that fosters trust and confidence among clients and stakeholders.

      As technology evolves, leveraging AI in PCI DSS technical audits can significantly enhance the effectiveness and efficiency of these processes. AI-driven tools can automate vulnerability scanning, detect anomalies, predict potential threats, and ensure continuous compliance monitoring. By incorporating AI, organizations can stay ahead of emerging threats and maintain a robust security posture.

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