Domain: Information
Question:
A financial services organization is strengthening its cyber fraud intelligence and cloud security posture as it migrates sensitive banking and identity workloads into AWS. Recent fraud investigations revealed gaps in identity governance, logging integrity, configuration drift, ransomware resilience, and third-party risk oversight. Leadership has directed the cyber fraud and security engineering teams to align operational controls with NIST 800-53 to reduce fraud exposure, prevent privilege abuse, and improve audit defensibility.                

A fintech partner that provides identity verification, transaction-risk enrichment, and fraud-scoring inputs suffers a breach, exposing customer attributes used in fraud decisioning. Fraud leaders worry this exposure could enable synthetic identity fraud, credential replay, transaction manipulation, or regulatory scrutiny related to vendor oversight and data-handling practices.

Referring to the NIST 800-53 Supply Chain Risk (SR), System Acquisition (SA), Planning (PL), and Risk Assessment (RA) control families, including SR-3 (Supply Chain Risk Management), SA-9 (External System Services), RA-3 (Risk Assessment), PL-2 (System Security Plan), and SI-4 (System Monitoring), how should a financial institution govern third-party cyber-fraud risk, enforce vendor accountability, and ensure external partners do not introduce systemic fraud or customer-data exposure?

Expected points in a correct answer:
States that SR-3 requires formally assessing vendor security posture, fraud-relevant data handling, and exposure pathways
States that SR-3 vendor assessments are intended to prevent suppliers from becoming an indirect fraud-enablement vector.
Recommends researching a vendor's security history and practices before forming any business relationship.
Recommends evaluating how a potential vendor handled a prior breach, specifically whether it was responsibly disclosed and contained.
Recommends assessing whether a potential vendor has documented lessons learned from prior security incidents as part of the pre-onboarding assessment.
Recommends asking potential vendors about the scope and level of event logging they maintain as part of pre-onboarding security assessment.
Recommends asking potential vendors how long they retain event logs as part of pre-onboarding security assessment.
States that SA-9 requires enforceable contractual requirements with vendors
States that RA-3 (Risk Assessment) ensures vendor-driven fraud risk is continuously evaluated throughout the vendor relationship rather than treated as a one-time onboarding checklist.
Recommends classifying organizational data into tiers such as critical for operations, customer data, and low-risk tools to establish a basis for scoping vendor permissions.
Recommends that vendor roles and asset access must be scoped and limited to exactly what is operationally needed
Recommends isolating vendor access by creating dedicated AWS IAM service accounts scoped with only read access to the specific data required for the vendor's function.
Recommends isolating vendor network access using dedicated subnets with strict traffic filtering enforced through security groups and ACLs.
States that a mature cyber-vetting program must operate under an assume-breach posture rather than assuming vendors will not be compromised.
States that a mature cyber-vetting program should aim to limit the blast radius of a vendor breach
Recommends selecting vendors who demonstrate responsible cyber hygiene practices as a criterion in the vendor vetting and selection process.
States that SI-4 (System Monitoring) requires vendor-associated assets and accounts to be continuously monitored for misconfigurations or alerts even when responsibilities are shared and systems are segmented.
Recommends alerting on accounts accessed from unexpected IP addresses or geographic locations as a detection for anomalous vendor activity.
Recommends alerting on access control modifications as a detection for unauthorized changes to vendor permissions.
Recommends alerting on large or out-of-scope data manipulations as a detection for potential vendor-initiated data exfiltration.
Recommends alerting on system logs indicating potential enumeration or discovery activities as a detection for vendor-side reconnaissance behavior.
Recommends using AWS CloudTrail, Amazon GuardDuty, and Amazon Security Hub together to monitor third-party access patterns and generate alerts for anomalous vendor behavior.
Recommends updating organizational plans and documents to reflect shared responsibility boundaries that clarify which fraud-control safeguards are owned by the institution versus the vendor.
States that PL-2 (System Security and Privacy Plan) requires the disaster recovery plan to incorporate third-party vendor scenarios including procedures for isolating compromised vendor assets.
States that PL-2 requires the incident response plan to include procedures for revoking vendor access across AWS IAM roles, access keys, and resource policies during a vendor-related incident.
Recommends establishing a vendor risk register that tracks each vendor's SR-3 assessment status, contractual obligations, and access scope to support ongoing compliance oversight.
Recommends implementing a formal vendor offboarding procedure that immediately revokes all access, IAM credentials, and resource permissions upon contract termination.
Recommends requiring vendors to provide evidence of independent third-party security assessments such as SOC 2 reports or penetration test results as part of the SA-9 onboarding process.
Recommends configuring AWS CloudTrail to retain immutable audit records of all vendor IAM activity to support forensic investigation following a vendor-related security incident.
Recommends establishing a vendor security incident communication protocol that defines internal escalation paths and notification procedures when a vendor discloses a breach.
Recommends storing the system security plan and vendor assessment documentation in an S3 bucket with server-side encryption and IAM-restricted access per NIST PL-2(e) to protect these sensitive planning documents from unauthorized disclosure or modification.
States that SR-3 assessments should span onboarding, ongoing monitoring, and contract renewal stages
States that SA-9 lists specific contractual requirements such as breach notification timelines, encryption, fraud-signal protection, audit rights, and acceptable subcontracting practices
States that the organization should consider the history and practices of their vendors when making decisions and ensure proper scoping of their permissions and rights to limit exposure in the event of a vendor breach.
Recommends that vendor assets and systems should be isolated where applicable as part of limiting vendor access scope.
Maps the event logging and log retention questions to both SR-3 and SA-9 control families.