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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:

Control Implementation Evidence
Security Policy Comprehensive security policy documented SECURITY.md
Threat Model STRIDE threat analysis with 15 threats Threat Model
Security Architecture 5 security domains documented Security Architecture
Incident Response 7 playbooks for critical/high incidents Incident Response
Compliance Roadmap Tracking compliance implementation Compliance Roadmap

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:

Risk Category Identified Threats Impact Mitigation
Spoofing Compromised Kubernetes API, stolen ServiceAccount tokens HIGH RBAC least privilege, short-lived tokens, network policies
Tampering Malicious DNS zone changes, RNDC key compromise CRITICAL RBAC read-only, signed commits, audit logging
Repudiation Untracked DNS changes, no audit trail HIGH Signed commits, audit logs (7-year retention), WORM storage
Information Disclosure Secret leakage, DNS data exposure CRITICAL Kubernetes Secrets, RBAC, secret access audit trail
Denial of Service DNS query flood, pod resource exhaustion HIGH Rate limiting (planned), pod resource limits, DDoS playbook
Elevation of Privilege Operator pod compromise, RBAC bypass CRITICAL Non-root containers, read-only filesystem, minimal RBAC

Attack Surface Analysis:

Attack Vector Exposure Risk Level Mitigation Status
Kubernetes API Internal cluster network HIGH ✅ RBAC, audit logs, network policies (planned)
DNS Port 53 Public internet HIGH ✅ BIND9 hardening, DDoS playbook
RNDC Port 9530 Internal cluster network CRITICAL ✅ Secret rotation, access audit, incident playbook P4
Container Images Public registries MEDIUM ✅ Trivy scanning, Chainguard zero-CVE images
CRDs (Custom Resources) Kubernetes API MEDIUM ✅ Input validation, RBAC, audit logs
Git Repository Public GitHub LOW ✅ Signed commits, branch protection, code review

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:

Control Implementation Evidence
Least Privilege RBAC Operator minimal RBAC (create/delete secrets for RNDC lifecycle, delete managed resources for cleanup) deploy/rbac/clusterrole.yaml
Secret Access Monitoring All secret access logged and alerted Secret Access Audit Trail
Quarterly Access Reviews Security team reviews access every quarter docs/compliance/access-reviews/
2FA Enforcement GitHub requires 2FA for all contributors GitHub organization settings
Signed Commits Cryptographic proof of code authorship Git commit signatures

Access Control Matrix:

Role Secrets CRDs Pods ConfigMaps Nodes
Operator Create/Delete (RNDC keys) Read/Write/Delete (managed) Read Read/Write/Delete Read
BIND9 Pods Read-only None None Read None
Developers None Read (kubectl) Read (logs) Read None
Operators Read (kubectl) Read/Write (kubectl) Read/Write Read/Write Read
Security Team Read (audit logs) Read Read Read Read

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:

Activity Frequency Tool Remediation SLA
Dependency Scanning Daily (00:00 UTC) cargo audit CRITICAL (24h), HIGH (7d)
Container Image Scanning Every PR + Daily Trivy CRITICAL (24h), HIGH (7d)
Code Security Review Every PR Manual + cargo clippy Before merge
Penetration Testing Annual External firm 90 days
Threat Intelligence Continuous GitHub Security Advisories As detected

Vulnerability Remediation SLAs:

Severity CVSS Score Response Time Remediation SLA Status
CRITICAL 9.0-10.0 < 15 minutes 24 hours ✅ Enforced
HIGH 7.0-8.9 < 1 hour 7 days ✅ Enforced
MEDIUM 4.0-6.9 < 4 hours 30 days ✅ Enforced
LOW 0.1-3.9 < 24 hours 90 days ✅ Enforced

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):

Playbook Scenario Response Time Recovery SLA
P1: Critical Vulnerability CVSS 9.0-10.0 vulnerability detected < 15 minutes Patch within 24 hours
P2: Compromised Operator Operator pod shows anomalous behavior < 15 minutes Isolate within 1 hour
P3: DNS Service Outage All BIND9 pods down, queries failing < 15 minutes Restore within 4 hours
P4: RNDC Key Compromise RNDC key leaked or unauthorized access < 15 minutes Rotate keys within 1 hour
P5: Unauthorized DNS Changes Unexpected zone modifications detected < 1 hour Revert within 4 hours
P6: DDoS Attack DNS query flood, resource exhaustion < 15 minutes Mitigate within 1 hour
P7: Supply Chain Compromise Malicious commit or compromised dependency < 15 minutes Rebuild within 24 hours

Business Continuity:

Capability Implementation RTO (Recovery Time Objective) RPO (Recovery Point Objective)
High Availability Multi-pod deployment (3+ replicas) 0 (no downtime) 0 (no data loss)
Zone Replication Primary + Secondary DNS instances < 5 minutes < 1 minute (zone transfer)
Disaster Recovery Multi-region deployment (planned) < 1 hour < 5 minutes
Data Backup DNS zones in Git + etcd backups < 4 hours < 1 hour

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:

Dependency Purpose Risk Level Mitigation
BIND9 DNS server software MEDIUM Chainguard zero-CVE images, Trivy scanning
Kubernetes Orchestration platform MEDIUM Managed Kubernetes (EKS, GKE, AKS), regular updates
Rust Dependencies Build-time libraries LOW Daily cargo audit, crates.io verified sources
Container Registries Image distribution LOW GHCR (GitHub), signed images, SBOM
AWS S3 Audit log storage LOW Encryption at rest/transit, WORM, IAM access controls

Third-Party Risk Management:

Control Implementation Evidence
Dependency Vetting Only use actively maintained dependencies (commits in last 6 months) Cargo.toml review
Vulnerability Scanning Daily cargo audit, Trivy container scanning GitHub Security tab
Supply Chain Security Signed commits, SBOM, reproducible builds Build Reproducibility
Vendor Assessments Annual review of critical vendors (BIND9, Kubernetes) Vendor assessment reports

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:

Activity Frequency Audience Purpose
Security Advisories As needed Public (GitHub) Coordinated disclosure of vulnerabilities
Threat Intelligence Continuous Security team Subscribe to GitHub Security Advisories, CVE feeds
Incident Reports After incidents Internal + Regulators Post-incident review, lessons learned
Compliance Reporting Quarterly Risk committee Basel III operational risk reporting

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:
  2. Security policies (SECURITY.md, docs/security/*.md)
  3. Threat model (STRIDE analysis)

  4. Security architecture documentation

  5. Incident Response:

  6. Incident response playbooks (P1-P7)
  7. Incident logs (if any occurred)

  8. Tabletop exercise results (semi-annual)

  9. Vulnerability Management:

  10. Vulnerability scan results (GitHub Security tab)
  11. Remediation tracking (GitHub issues, CHANGELOG.md)

  12. Monthly remediation reports

  13. Access Controls:

  14. RBAC policy and verification output
  15. Quarterly access review reports

  16. Secret access audit logs

  17. Audit Trail:

  18. S3 bucket configuration (WORM, retention)
  19. Log integrity verification results

  20. Sample audit logs (redacted)

  21. Business Continuity:

  22. High availability architecture
  23. Disaster recovery procedures
  24. RTO/RPO metrics

See Also