Basel III Compliance

Basel III: International Regulatory Framework for Banks

Overview

Basel III is an international regulatory framework for banks developed by the Basel Committee on Banking Supervision (BCBS). While primarily focused on capital adequacy, liquidity risk, and leverage ratios, Basel III also includes operational risk requirements that cover technology and cyber risk.

Bindy, as critical DNS infrastructure in a regulated banking environment, falls under Basel III operational risk management requirements.

Key Basel III Areas Applicable to Bindy:

1. Operational Risk (Pillar 1): Technology failures, cyber attacks, service disruptions
2. Cyber Risk Management (2018 Principles): Cybersecurity governance, threat monitoring, incident response
3. Business Continuity (Pillar 2): Disaster recovery, high availability, resilience
4. Operational Resilience (2021 Principles): Ability to withstand severe operational disruptions

Basel III Cyber Risk Principles

The Basel Committee published Cyber Risk Principles in 2018, which define expectations for banks’ cybersecurity programs. Bindy complies with these principles:

Principle 1: Governance

Requirement: Board and senior management should establish a comprehensive cyber risk management framework.

Bindy Implementation:

Evidence:

• Security documentation (4,010 lines across 7 documents)
• Compliance tracking (H-1 through H-4 complete)
• Quarterly security reviews

Status: ✅ COMPLIANT - Comprehensive cyber risk framework documented

Principle 2: Risk Identification and Assessment

Requirement: Banks should identify and assess cyber risks as part of operational risk management.

Bindy Implementation:

Attack Surface Analysis:

Evidence:

• Threat Model - 15 STRIDE threats, 5 attack scenarios
• Security Architecture - Attack surface analysis
• Quarterly risk reviews (documented in compliance roadmap)

Status: ✅ COMPLIANT - Comprehensive risk identification and mitigation

Principle 3: Access Controls

Requirement: Banks should implement strong access controls, including least privilege.

Bindy Implementation:

Access Control Matrix:

Evidence:

• RBAC policy: deploy/rbac/clusterrole.yaml
• RBAC verification: ./deploy/rbac/verify-rbac.sh
• Secret access logs: Elasticsearch query Q1 (quarterly)
• Access review reports: docs/compliance/access-reviews/YYYY-QN.md

Status: ✅ COMPLIANT - Least privilege access, quarterly reviews, audit trail

Principle 4: Threat and Vulnerability Management

Requirement: Banks should implement a threat and vulnerability management process.

Bindy Implementation:

Vulnerability Remediation SLAs:

Evidence:

• Vulnerability Management Policy
• GitHub Security tab - Vulnerability scan results
• CHANGELOG.md - Remediation history
• Monthly vulnerability remediation reports

Status: ✅ COMPLIANT - Daily scanning, defined SLAs, automated tracking

Principle 5: Cyber Resilience and Response

Requirement: Banks should have incident response and business continuity plans for cyber incidents.

Bindy Implementation:

Incident Response Playbooks (7 Total):

Business Continuity:

Evidence:

• Incident Response Playbooks
• Semi-annual tabletop exercise reports
• Incident logs (if any occurred): S3 bindy-audit-logs/incidents/

Status: ✅ COMPLIANT - 7 incident playbooks, business continuity plan

Principle 6: Dependency on Third Parties

Requirement: Banks should manage cyber risks associated with third-party service providers.

Bindy Third-Party Dependencies:

Third-Party Risk Management:

Evidence:

• Cargo.toml, Cargo.lock - Pinned dependency versions
• SBOM (Software Bill of Materials) - Release artifacts
• Vendor assessment reports (annual)

Status: ✅ COMPLIANT - Third-party dependencies vetted, scanned, monitored

Principle 7: Information Sharing

Requirement: Banks should participate in information sharing to enhance cyber resilience.

Bindy Information Sharing:

Evidence:

• GitHub Security Advisories (if any published)
• Quarterly risk committee reports
• Incident post-mortems (if any occurred)

Status: ✅ COMPLIANT - Active participation in threat intelligence sharing

Basel III Operational Risk Reporting

Quarterly Operational Risk Report Template:

[Bank Letterhead]

Basel III Operational Risk Report
Q4 2025 - Bindy DNS Infrastructure

Reporting Period: October 1 - December 31, 2025
Prepared by: [Security Team Lead]
Reviewed by: [Chief Risk Officer]

1. OPERATIONAL RISK EVENTS

   1.1 Cyber Incidents:
       - 0 critical incidents
       - 0 high-severity incidents
       - 2 medium-severity incidents (P3: DNS Service Outage)
         - Root cause: Kubernetes pod OOMKilled (memory limit too low)
         - Resolution: Increased memory limit from 512Mi to 1Gi
         - RTO achieved: 15 minutes (target: 4 hours)
       - 0 data breaches

   1.2 Service Availability:
       - Uptime: 99.98% (target: 99.9%)
       - DNS query success rate: 99.99%
       - Mean time to recovery (MTTR): 15 minutes

   1.3 Vulnerability Management:
       - Vulnerabilities detected: 12 (3 HIGH, 9 MEDIUM)
       - Remediation SLA compliance: 100%
       - Average time to remediate: 3.5 days (CRITICAL/HIGH)

2. COMPLIANCE STATUS

   2.1 Basel III Cyber Risk Principles:
       - ✅ Principle 1 (Governance): Security policies documented
       - ✅ Principle 2 (Risk Assessment): Threat model updated Q4 2025
       - ✅ Principle 3 (Access Controls): Quarterly access review completed
       - ✅ Principle 4 (Vulnerability Mgmt): SLAs met (100%)
       - ✅ Principle 5 (Resilience): Tabletop exercise conducted
       - ✅ Principle 6 (Third Parties): Vendor assessments completed
       - ✅ Principle 7 (Info Sharing): Threat intelligence active

   2.2 Audit Trail:
       - Audit logs retained: 7 years (WORM storage)
       - Log integrity verification: 100% pass rate
       - Secret access reviews: Quarterly (last: 2025-12-15)

3. RISK MITIGATION ACTIONS

   3.1 Completed (Phase 2):
       - ✅ H-1: Security Policy and Threat Model
       - ✅ H-2: Audit Log Retention Policy
       - ✅ H-3: Secret Access Audit Trail
       - ✅ H-4: Build Reproducibility Verification

   3.2 Planned (Phase 3):
       - L-1: Implement NetworkPolicies (Q1 2026)
       - M-3: Implement Rate Limiting (Q1 2026)

4. REGULATORY REPORTING

   4.1 PCI-DSS: Annual audit scheduled (Q1 2026)
   4.2 SOX 404: Quarterly ITGC attestation provided
   4.3 Basel III: This report (quarterly)

Approved by:
[Chief Risk Officer Signature]
Date: 2025-12-31

Basel III Audit Evidence

For Basel III operational risk reviews, provide:

1. Cyber Risk Framework:

   • Security policies (SECURITY.md, docs/security/*.md)
   • Threat model (STRIDE analysis)
   • Security architecture documentation

2. Incident Response:

   • Incident response playbooks (P1-P7)
   • Incident logs (if any occurred)
   • Tabletop exercise results (semi-annual)

3. Vulnerability Management:

   • Vulnerability scan results (GitHub Security tab)
   • Remediation tracking (GitHub issues, CHANGELOG.md)
   • Monthly remediation reports

4. Access Controls:

   • RBAC policy and verification output
   • Quarterly access review reports
   • Secret access audit logs

5. Audit Trail:

   • S3 bucket configuration (WORM, retention)
   • Log integrity verification results
   • Sample audit logs (redacted)

6. Business Continuity:

   • High availability architecture
   • Disaster recovery procedures
   • RTO/RPO metrics

See Also

• Threat Model - STRIDE threat analysis
• Security Architecture - Security domains, data flows
• Incident Response - 7 playbooks (P1-P7)
• Vulnerability Management - Remediation SLAs
• Audit Log Retention - Long-term log retention
• Compliance Roadmap - Tracking compliance progress