GLBA Safeguards Rule Risk Assessment, 2023 Complete Guide

SaltyCloud Research Team

Published on April 13, 2023  •  Read Time

Table of Contents

Welcome to the 2023 edition of our Complete Guide, GLBA Safeguards Rule Risk Assessment. This Complete Guide is an essential extension of our cornerstone article, Understanding the GLBA Safeguards Rule, Complete Guide.


The Gramm-Leach-Bliley Act’s (GLBA) Safeguards Rule mandates that financial institutions conduct regular risk assessments to evaluate the security of customer information.

This comprehensive guide from SaltyCloud outlines key steps such as determining scope, selecting frameworks, designing questionnaires, analyzing results, tracking findings, and setting remediation plans. Whether you need a refresher or are undertaking your first GLBA risk assessment, this guide offers best practices to help your financial institution perform effective and collaborative risk assessments that enable compliance and cyber resilience.

Understanding the Basics

What is the GLBA?

The GLBA is federal legislation that mandates financial institutions to be transparent about their information-sharing practices and to take robust measures to secure sensitive consumer data.

What is the GLBA Safegaurds Rule?

The GLBA Safeguards Rule is a regulatory framework that mandates financial institutions to implement comprehensive security measures for protecting customer data. Originally established in 2003 and known formally as the Standards for Safeguarding Customer Information, the rule outlines a multi-layered approach involving administrative, technical, and physical safeguards. Its primary goal is to ensure the security and privacy of customer information. The Federal Trade Commission (FTC) most recently updated these guidelines on December 9, 2021, with the amendments, termed the Final Rule, becoming effective on June 9, 2023.

What is a GLBA Safeguards Rule risk assessment?

A GLBA Safeguards Rule risk assessment is a structured process that financial institutions undertake to identify and assess vulnerabilities specifically related to the safeguards required for customer information.

A GLBA Safeguards Rule risk assessment is a structured process that financial institutions undertake to identify and assess vulnerabilities specifically related to the safeguards required for customer information. 

While the Safeguards Rule provides the foundational elements of the risk assessment, the specific methodology can differ among organizations based on factors like size and complexity. Conducting these risk assessments regularly is not just a compliance checkbox but a cornerstone for building a robust information security program.

In this process, existing safeguards are evaluated against a baseline of security controls. These controls can be aligned with industry-standard frameworks such as NIST 800-171, NIST 800-53, NIST CSF, and ISO 27001, which meet the Rule’s stipulations in 16 CFR 314.3 and 314.4

The Safeguards Rule mandates that risk assessments must, at a minimum:

  • Include criteria for evaluating and categorizing identified security risks or threats to the required safeguards for customer information, such as likelihood, impact, and velocity ratings.
  • Assess the confidentiality, integrity, and availability of information systems and customer data based on the Safeguards Rule’s standards, including identifying any gaps.
  • Describe requirements for how identified risks related to the safeguards will be mitigated and how the information security program will address these risks. This involves tracking findings, evidence, risk owners, remediation plans, milestones, and other details.

Financial institutions are obligated to conduct these risk assessments on a regular basis and to revisit them, especially after significant changes in operations or business arrangements, to ensure the continued adequacy of their safeguards.

GLBA Safeguards Rule Risk Assessment Checklist

Conducting a risk assessment under the GLBA Safeguards Rule is a multifaceted endeavor that may encompass various business units, assets, personnel, leadership, and even third-party entities. The assessment should rigorously document elements such as risk ownership, action plans for remediation, and criteria for prioritizing findings. Depending on your institution’s specific requirements, the depth of the risk assessment can range from a basic qualitative questionnaire or survey to a thorough quantitative analysis.

Scope your Organization

Scoping is an indispensable first step in any risk assessment and is intrinsically linked to a broader IT Asset Management program. This activity involves identifying and understanding the assets, systems, and data that require protection. Data classification schemes are particularly useful for determining what falls under the purview of the GLBA Safeguards Rule, as not all areas of your institution are governed by this regulation.

IT Asset Management is not a one-size-fits-all endeavor; it varies depending on the organization’s unique needs and compliance requirements. In the context of information security, IT Asset Management serves as a foundational element that helps organizations identify what needs to be protected, who owns these assets, and where they are located. This granular understanding is crucial for effective risk management and compliance.

IT Asset Management serves as a foundational element that helps organizations identify what needs to be protected, who owns these assets, and where they are located.

Several industry-standard guides offer comprehensive frameworks and methodologies for effective scoping and IT Asset Management:

  • NIST 1800-5: Created by the National Institute of Standards and Technology, this guide focuses on IT Asset Management, particularly for financial services companies. It offers a modular approach to asset management that includes both hardware and software, aiming to help organizations reduce research and development costs while enhancing asset management efficiency. It’s a valuable resource for organizations looking to strengthen their security measures.
  • ISO/IEC 19770-1:2017: This globally recognized standard provides a structured framework for IT Asset Management. As part of the ISO 19770 series, it sets the best practices for managing IT assets, covering aspects like governance, roles and responsibilities, and planning. It’s designed to assist organizations in both establishing and maintaining an effective IT Asset Management system and is applicable across various industries.
  • CMMC Assessment Scope – Level 2: Specifically designed for Defense Industrial Base contractors, this guide focuses on defining the scope for a Cybersecurity Maturity Model Certification assessment. It categorizes assets into types such as Controlled Unclassified Information Assets and Security Protection Assets, offering guidelines on how each should be managed within a CMMC assessment. This guide is crucial for organizations that collaborate with the Department of Defense and are seeking to comply with CMMC requirements.

Enlist Participants

Risk assessment is a team sport, demanding a blend of expertise from various corners of the organization. Whether it’s the granular operational knowledge of business unit representatives or the technical acumen of IT professionals, the success of any risk assessment hinges on collaborative input. This collective wisdom informs everything from data protection and system vulnerabilities to strategic alignment with organizational goals.

Risk assessment is a team sport, demanding a blend of expertise from various corners of the organization.

  • Business Unit Representatives: Often considered the frontline staff, these individuals have a deep understanding of the operations, assets, and data within their specific units, including any data subject to the GLBA Safeguards Rule. Their specialized insights are invaluable for pinpointing and understanding risks unique to their areas of operation.
  • IT Teams: These technical experts are essential for identifying system vulnerabilities and proposing both automated and manual solutions for risk mitigation. Their role is critical in the implementation and continuous monitoring of these measures to ensure their effectiveness.
  • Organizational Leadership: The active engagement and commitment of senior management are crucial for ensuring that risk management initiatives align with the broader strategic goals of the organization. Their decisive role is vital in resource allocation and priority setting for risk mitigation efforts.
  • Data Stewards: These compliance specialists are tasked with ensuring that the organization is in line with all relevant legal and regulatory requirements, including those specific to the GLBA. They are responsible for confirming that risk management activities are compliant and up to standard.
  • Third Parties: These external stakeholders introduce an added layer of complexity and risk, particularly in the realm of supply chain vulnerabilities. Their participation is key for a comprehensive understanding of the risk landscape that extends beyond the organization’s walls.

While automated compliance solutions offer invaluable tools in the risk assessment process, they can’t substitute for the nuanced insights that only human interaction can provide. Collaboration is more than just beneficial—it’s essential. Utilizing a GRC Collaboration Platform can further enable this, serving as a centralized hub for all stakeholders to contribute, track, and manage risk assessment activities. Building trust and fostering a collaborative culture are pivotal steps in ensuring meaningful participation in risk assessment activities. This may involve everything from one-on-one conversations and departmental briefings to organization-wide communications that underscore the collective responsibility we all share in effective risk management.

Choose a Security Framework

Selecting a security framework offers you flexibility, as the GLBA Safeguards Rule doesn’t mandate a specific one. Regardless of your choice, the ideal approach is to crosswalk the controls from your selected framework to the Safeguards Rule requirements as outlined in 16 CFR Part 314. To facilitate this, the Secure Controls Framework (SCF), a metaframework that organizations can use as a “Rosetta Stone” to build secure and compliant cybersecurity and data privacy programs, is available for free and provides a comprehensive crosswalk between dozens of regulations and frameworks, including the NIST Cybersecurity Framework (NIST CSF), NIST 800-53, NIST 800-171, Center for Internet Security’s Critical Security Controls (CIS), and ISO27001.

While the SCF already includes a GLBA crosswalk, we’ve remapped it in the following table for even more accuracy.

GLBA Section GLBA Requirement Summary Relevant SCF Control(s) by SaltyCloud
314.3(a) You must create, carry out, and keep up a comprehensive written information security program. It should have administrative, technical, and physical protections appropriate for your company’s size, complexity, activities, and how sensitive the information is. CPL-1
314.4(a) Appoint a qualified person to oversee and carry out your information security program. GOV-04
314.4(b) Base your information security program on a written assessment of reasonably likely internal and external risks. RSK-04
314.4(c)(1) Put in place access controls to confirm users’ identities and limit access to what they need. IAC-15
314.4(c)(2) Identify and manage data, people, devices, systems, and facilities based on importance and risk approach. AST-02
314.4(c)(3) Encrypt customer information in transit and at rest. CRY-01
314.4(c)(4) Adopt secure development practices for applications that access customer information. SEA-01
314.4(c)(5) Use multi-factor authentication to access information systems. IAC-06
314.4(c)(6)(i) Develop procedures to securely dispose of customer information. DCH-08
314.4(c)(7) Adopt change management procedures. CHG-01
314.4(c)(8) Implement controls to monitor and log activity to detect unauthorized access. MON-02
314.4(d)(1) Regularly test or monitor how well safeguards are working. IAO-02
314.4(d)(2) Do annual penetration testing, vulnerability assessments every 6 months, and when changes could impact security. VPM-06
314.4(e) Give personnel security training and maintain qualified security staff. SAT-02
314.4(f) Oversee service providers’ (AKA third-party vendors) security measures. TPM-01
314.4(g) Adjust the information security program based on testing results, changes, and assessments. GOV-03
314.4(h) Create an incident response plan. IRO-02
314.4(i) Require an annual written report to the board/senior officer on security program status and recommendations. GOV-01.2

Design a Questionnaire

A compliance questionnaire, also known as a self-assessment, is an interactive tool adept at evaluating the effectiveness of your security measures and measuring gaps against the GLBA Safeguards Rule. Its interactive nature allows for the quick organization of information and the contextual collection of evidence. Its versatility makes it suitable for organizations of all sizes and complexities, whether the participants are technical or non-technical.

A well-designed questionnaire provides more than a snapshot of your organization’s current compliance and security posture.

A well-designed questionnaire provides more than a snapshot of your organization’s current compliance and security posture. It also serves as an engaging platform for structured dialogue with various stakeholders, from technical teams to leadership. This captures the nuanced human insights that automated compliance solutions alone can’t offer.

The customization options in questionnaires go beyond the questions themselves. You can tailor answer choices, assign different weights to questions based on their importance, and even indicate varying levels of criticality. This flexibility not only allows for a more nuanced collection of answers but also provides an organized framework for gathering evidence and contextual documentation, which is invaluable during audits or evaluations.

As mentioned in the previous section, the Secure Controls Framework (SCF) offers a powerful metaframework which can be mapped to the GLBA Safeguards Rule and provides a robust, industry-standard set of questions for assessing compliance and security controls.

While questionnaires are invaluable, they’re not the sole method for measuring compliance and security controls. Other methods include:

  • Automated Scans: While capable of scanning your systems for compliance automatically, these scans often necessitate installing agents on assets or devices. This may not always be feasible due to security or operational limitations and could still overlook subtle vulnerabilities or generate false positives.
  • Third-Party Audits: These provide an impartial evaluation but come with their own set of drawbacks: they can be costly, time-consuming, and offer only a snapshot in time, lacking ongoing control monitoring.

Launch your Questionnaire

This is the pivotal moment where all your preparatory efforts come together. You’ve designed a comprehensive questionnaire, and your participants are primed for the risk assessment. Now, it’s time to launch, and this is where your organized participants truly shine. Establishing a risk assessment timeline is your first order of business. Align it with your organization’s objectives and limitations, as the timing and frequency of administering the questionnaire are key to gathering timely, actionable data. Your participants, already organized and briefed, are now ready to actively engage in this crucial process.

Managing this endeavor effectively calls for the right tools. A GRC Collaboration Platform can be a game-changer. It centralizes all questionnaires and collaborative efforts, simplifying management and enabling automatic scoring. Alternatively, you might consider using spreadsheets or survey platforms like Google Forms, Survey Monkey, or Qualtrics. While these tools can be viable for small-scale efforts or initial explorations, they weren’t designed for comprehensive risk assessments and come with their own sets of limitations.

Managing this endeavor effectively calls for the right tools. A GRC Collaboration Platform can be a game-changer.

Being realistic is essential. Rolling out a comprehensive risk assessment is a complex task, especially for larger organizations. That’s why a trial phase with a select group of participants and business units is often advisable. It allows you to identify and address any issues before a full-scale rollout.

Remember, the goal is to work smarter, not harder. A balanced and realistic approach ensures your questionnaire serves as an effective lens into your organization’s compliance and security posture.

Synthesize the Results

After successfully launching your questionnaire and gathering responses, the next step is to synthesize the results into actionable insights. This involves generating findings reports, compliance scorecards, and other data visualizations. For example, a compliance scorecard might use a color-coded system to quickly indicate which business units are fully compliant (green), partially compliant (yellow), or non-compliant (red).

The synthesized data provides invaluable visibility into glaring compliance gaps. This serves as the foundation for strategic and productive conversations with leadership. Imagine discovering that multiple business units lack proper data encryption controls. This finding could be the catalyst for securing budget approval for a new encryption solution, thereby enhancing your organization’s data security posture.

The synthesized data provides invaluable visibility into glaring compliance gaps.

Additionally, the results may reveal outliers—critical business units that are either underserved or failing to meet compliance requirements. For instance, you might find that your R&D department, despite being a critical business unit, has outdated security protocols. This would be a red flag requiring immediate attention and possibly a reevaluation of resource allocation.

Importantly, this synthesized data also serves as the basis for proving compliance to auditors. When auditors ask for evidence of compliance, you can present your findings reports and scorecards as documented proof of your ongoing efforts to meet regulatory standards.

Track, Prioritize, Remediate, and Reassess

The journey from questionnaire to actionable insights culminates in the risk register, a centralized hub integrated into a GRC Collaboration Platform. After synthesizing your questionnaire results into a list of findings, these are then “published” to the risk register. This is where the granular details come into play, aligning with the meticulous tracking and documentation required by the GLBA Safeguards Rule.

In the risk register, each finding can be enriched with additional details such as impact, likelihood, and velocity. You can also assign deadlines, outline remediation strategies, designate owners, and link related assets. For instance, if a critical research environment is found to have inadequate cybersecurity measures, the risk register would specify the potential impact (e.g., data breach), likelihood (e.g., high), and velocity (e.g., fast) of this risk. A responsible leader would be assigned, a remediation strategy outlined, and a deadline set for resolving the issue. Related assets like servers and databases would also be linked to this risk entry.

While spreadsheets can serve as a makeshift risk register, they lack the scalability and collaborative features of a dedicated platform like IsoraGRC, often leading to lower organizational adoption.

The risk register doesn’t just track risks; it fosters a culture of accountability and risk-awareness.

The risk register doesn’t just track risks; it fosters a culture of accountability and risk-awareness. By assigning specific details and owners to each risk, you’re facilitating a collective sense of responsibility that permeates the organization. This not only aids in closing compliance gaps but also sustains a culture where risk management is a shared responsibility.

Third-Party Security Risk Management (TPSRM)

Compliance with the GLBA Safeguards Rule isn’t just an internal affair; it extends to your third-party service providers. As outlined in 16 CFR 314.4(f), you’re required to:

  • Select and retain service providers that can adequately safeguard customer information.
  • Contractually obligate these providers to maintain these safeguards.
  • Conduct regular assessments based on the risk profile of each provider and the adequacy of their security measures.

Compliance with the GLBA Safeguards Rule isn’t just an internal affair; it extends to your third-party service providers.

The vetting process for service providers should be thorough, encompassing audits of their security policies and even simulated security tests to gauge their preparedness. Once onboarded, contracts should spell out the required security protocols, from data encryption to incident response.

Scheduled assessments are non-negotiable. The frequency and depth of these assessments should align with the risk each provider poses. For instance, a cloud storage provider handling sensitive data might warrant quarterly security audits.

The urgency for a robust TPSRM program has never been higher, given the rise in supply chain attacks. Remember, your security posture is only as robust as your weakest link. If third-party vendors interact with GLBA-covered data, they must meet the same security standards as your internal operations.

IsoraGRC for GLBA Safeguards Rule

The GLBA Safeguards Rule isn’t just a regulatory guideline; it’s a mandate with serious implications for non-compliance. At its core, the rule calls for organizations to establish a robust information security program, maintain an IT asset inventory, continuously assess risks across covered business units and third parties, and provide board-level reporting.

Isora is a powerful GRC collaboration platform, specifically designed to meet the majority of the requirements outlined in 16 CFR 314.3 and 314.4 for GLBA Safeguards Rule compliance. More than just a tool for compliance, Isora focuses on people to drive risk reduction, encourage program adoption, and foster a risk-aware culture.

With Isora, information security & assurance teams of all sizes can:

✔ Launch custom or prebuilt security questionnaires for assessments, allowing both internal teams and third parties to answer questions, upload evidence, and collaborate, and sign attestations.

✔ Create a centralized inventory of IT assets, applications, and third parties, complete with metadata details like data classification, ownership, and user tracking.

✔ Connect with any other platforms, including existing procurement, risk intelligence, and GRC platforms to enable the flow of information.

✔ Generate detailed risk reports and scorecards based on completed assessments that help everyone know what needs attention.

Join dozens of established organizations who trust Isora to help them build and scale their GRC programs.

Get a demo to learn how Isora can help your team ace their GLBA Safeguards Rule audit.

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