Banking Law and Operational Technology Security in Banking Infrastructure — Kuwait

1. Introduction

Operational technology (OT) security in banking infrastructure concerns the protection and reliable operation of the technological systems that support essential banking and financial services.

In Kuwait, OT security must be understood together with cybersecurity, operational resilience, business continuity, payment-system security, electronic transactions, outsourcing and Central Bank of Kuwait (CBK) supervision.

The regulatory position has become significantly stronger with the CBK's Cyber & Operational Resilience Framework (CORF), Version 1.0, issued on 3 December 2025. CBK describes CORF as the evolution from its 2020 Cybersecurity Framework toward a “resilience-first” and “maturity-oriented” regulatory model.

For banking infrastructure, the objective is no longer simply:

Prevent unauthorized access.

It is broader:

Protect critical banking infrastructure, maintain essential services during disruption, recover quickly, and adapt after an incident.

2. Meaning of Operational Technology Security in Banking

In ordinary industrial environments, OT usually refers to systems that monitor or control physical processes.

In banking, the concept is broader and can include technology supporting the physical and operational infrastructure of financial services, such as:

• data-centre infrastructure;
• power and environmental-control systems;
• physical access-control systems;
• network infrastructure;
• telecommunications;
• ATM infrastructure;
• payment-processing infrastructure;
• transaction-processing systems;
• backup and recovery systems;
• security monitoring;
• banking-system interfaces.

It should be distinguished from ordinary IT security.

For a modern digital bank, however, the boundary between IT and OT can be increasingly blurred.

3. Legal Foundation

The principal legal framework consists of several layers.

1. Law No. 32 of 1968

The Central Bank of Kuwait and Regulation of Banking Business Law establishes the basic supervisory architecture.

Article 54 defines banks by reference to activities including receiving deposits, lending, handling cheques, foreign exchange and other banking operations.

2. Electronic Transactions Law

Kuwait's electronic-transactions legislation provides the broader legal foundation for electronic dealings and electronic records.

3. CBK Cybersecurity Framework 2020

This provided the earlier sector-wide cybersecurity baseline.

4. CBK Cyber & Operational Resilience Framework 2025

CORF represents the current evolution of the framework and addresses cyber resilience, operational resilience and third-party risk.

5. Payment-system regulation

CBK also regulates the technological infrastructure underlying Kuwait's payment ecosystem.

4. CBK's Supervisory Role

The CBK is central to banking-infrastructure security.

The basic statutory relationship is:

Banking activity

↓

CBK supervision

↓

Technology and operational controls

↓

Continuity of banking services

Article 54 of the banking law establishes the scope of banking activity, while CBK's regulatory framework provides detailed supervisory requirements.

Therefore, a bank cannot argue that a technology system is merely an internal IT matter when its failure could materially affect regulated banking operations.

5. Evolution from Cybersecurity to Operational Resilience

The regulatory development can be represented as:

2020

Cybersecurity Framework

↓

Protection of:

• systems;
• infrastructure;
• operations;
• information.

↓

2025

Cyber & Operational Resilience Framework

↓

Cyber Resilience

Operational Resilience

Third-Party Risk Management

CBK expressly describes CORF as the next stage in its regulatory strategy and says that it is intended to enable regulated entities to anticipate, withstand, recover from and adapt to disruptions.

6. The 2025 CORF

The Cyber & Operational Resilience Framework (CORF) is currently the most important CBK framework for this subject.

It was issued on 3 December 2025.

The framework contains three major regulatory baselines:

A. Cyber Resilience

Protection against cyber threats and the ability to continue operating after cyber incidents.

B. Operational Resilience

Ability to maintain critical services during technological, physical or operational disruption.

C. Third-Party Risk Management

Management of risks arising from suppliers, outsourcing providers and other external dependencies.

A detailed implementation analysis describes CORF as containing 27 domains, 93 sub-domains, 200 control areas and 876 controls.

7. Critical Banking Infrastructure

Operational technology security should begin with identifying critical infrastructure.

Examples include:

Payment infrastructure

• payment switches;
• clearing systems;
• settlement systems;
• payment gateways.

Customer infrastructure

• ATMs;
• mobile banking;
• internet banking;
• card systems.

Core banking

• account databases;
• transaction-processing systems;
• customer-information systems.

Physical infrastructure

• data centres;
• backup facilities;
• power systems;
• cooling systems;
• physical security.

Network infrastructure

• telecommunications;
• routers;
• firewalls;
• secure banking networks.

8. Kuwait's Payment Infrastructure

Kuwait's payment ecosystem demonstrates why infrastructure security is a banking-law issue.

CBK describes CBK-Net as a large-scale secure network through which participating banks connect to payment infrastructure.

The updated KASSIP operates through CBK-Net, uses ISO 20022 messaging and incorporates encryption and security technologies. CBK also states that it follows the Principles for Financial Market Infrastructures issued by the BIS.

This means that the security of payment infrastructure is directly connected with:

• financial stability;
• payment continuity;
• systemic risk;
• customer protection.

9. Availability as a Legal Objective

Traditional information security frequently focuses on:

Confidentiality + Integrity + Availability

For banking infrastructure, availability can be particularly important.

Imagine:

A bank's database remains confidential and uncompromised, but its payment infrastructure is unavailable for eight hours.

There may be no data breach, yet the incident could cause:

• failed payments;
• delayed salaries;
• inability to access accounts;
• merchant disruption;
• liquidity problems;
• reputational damage.

Operational resilience therefore treats availability as a core banking objective.

10. Business Continuity

Banks must have arrangements for maintaining critical banking services when normal infrastructure becomes unavailable.

A business-continuity plan should address scenarios such as:

• cyberattack;
• data-centre failure;
• telecommunications failure;
• power interruption;
• physical disaster;
• software failure;
• equipment failure;
• third-party outage;
• insider attack;
• payment-system disruption.

CBK's recent statements demonstrate the importance placed on continuity planning. In March 2026, CBK said local banks had strengthened business-continuity and emergency plans, upgraded digital infrastructure and conducted regular drills.

11. Disaster Recovery

Disaster recovery is the technological component of restoring banking operations.

Important concepts include:

Recovery Time Objective (RTO)

How quickly a critical system should be restored.

Recovery Point Objective (RPO)

How much transaction/data loss can be tolerated following a disruption.

For example:

If a payment database has an RPO of five minutes, the bank should design recovery mechanisms so that a catastrophic failure does not result in more than approximately five minutes of unrecovered transaction data.

12. Redundancy

Critical banking infrastructure should avoid single points of failure.

Possible mechanisms include:

• redundant servers;
• redundant network connections;
• multiple processing environments;
• backup data centres;
• alternative telecommunications;
• redundant power supplies;
• geographically separated recovery facilities.

The basic principle is:

One critical system should not be capable of bringing down an entire essential banking service by itself.

13. Data-Centre Security

Data centres are particularly important because they support:

• core banking;
• databases;
• payment systems;
• cybersecurity systems;
• customer channels.

Physical-security controls may include:

• controlled entry;
• authentication;
• surveillance;
• visitor management;
• environmental monitoring;
• fire protection;
• backup electricity;
• cooling redundancy;
• emergency procedures.

Cybersecurity and physical security must operate together.

A sophisticated firewall cannot protect a server from a physical infrastructure failure if there is no redundancy or recovery capability.

14. Network Security

Banking networks require layered protection.

Important controls include:

• network segmentation;
• firewalls;
• intrusion detection;
• intrusion prevention;
• encryption;
• secure remote access;
• network monitoring;
• privileged-access controls;
• anomaly detection.

Segmentation is especially important.

For example:

ATM network

should not automatically have unrestricted access to:

core banking database

because compromise of one environment should not automatically compromise the entire banking infrastructure.

15. ATM Security

ATMs are part of the operational infrastructure of banks.

Security risks include:

• malware;
• skimming;
• physical tampering;
• network attacks;
• unauthorized access;
• cash manipulation;
• denial-of-service attacks.

An ATM-security programme should combine:

Physical security + software security + network security + transaction monitoring.

16. Payment-System Security

Payment systems are particularly sensitive because they can create systemic consequences.

A disruption can affect:

• banks;
• merchants;
• government payments;
• salaries;
• consumers;
• financial institutions.

CBK's payment infrastructure includes systems designed for secure and efficient payment processing, while the regulator has continued to develop instant-payment capabilities.

Thus:

Payment-system resilience is a component of financial-system stability.

17. Authentication and Authorization

A critical distinction is:

Authentication

Who are you?

Authorization

What are you legally permitted to do?

For corporate banking, for example:

Employee logs in

does not necessarily mean:

Employee can transfer KD 1 million.

The system must reflect the customer's legal mandate.

A resilient system therefore uses:

• role-based access;
• transaction limits;
• dual approval;
• segregation of duties;
• privileged-access management.

18. Privileged Access

Privileged users can have extensive system capabilities.

Examples:

• database administrators;
• system administrators;
• network administrators;
• cybersecurity administrators.

Their accounts therefore require enhanced protection.

Controls may include:

• multi-factor authentication;
• privileged-access management;
• session monitoring;
• just-in-time access;
• approval procedures;
• logging;
• periodic access review.

19. Change Management

Technology changes can themselves create operational risk.

A bank should therefore control:

• software updates;
• configuration changes;
• firewall changes;
• database changes;
• infrastructure modifications;
• application releases.

A change should generally pass through:

Request → Risk assessment → Approval → Testing → Deployment → Monitoring → Rollback capability

This is particularly important in systems that process payments continuously.

20. Patch Management

Unpatched systems may contain known vulnerabilities.

Banks should therefore maintain:

• asset inventories;
• vulnerability assessments;
• patch schedules;
• emergency-patching procedures;
• exception registers;
• management oversight.

However, patching a critical banking system without testing can itself create an outage.

Operational resilience therefore requires balancing:

security urgency

with

service continuity.

21. Third-Party Technology Providers

Modern banks increasingly depend upon:

• cloud providers;
• software vendors;
• telecommunications companies;
• cybersecurity providers;
• payment processors;
• data-centre operators.

CORF expressly treats third-party risk management as one of its three strategic baselines.

Contracts with critical providers should address:

• security standards;
• availability;
• incident reporting;
• audit rights;
• subcontracting;
• business continuity;
• recovery;
• data protection;
• termination;
• exit arrangements.

22. Cloud Computing Risk

Cloud technology can improve:

• scalability;
• availability;
• disaster recovery;
• efficiency.

But it can also create:

• concentration risk;
• dependency risk;
• data-security risk;
• service interruption risk;
• vendor lock-in.

A bank therefore needs an exit strategy.

The question should not merely be:

Can we use this cloud provider?

but also:

Can we continue banking operations if this provider becomes unavailable?

23. Incident Response

A banking institution needs a formal incident-response process.

A simplified model is:

Detection

↓

Classification

↓

Containment

↓

Investigation

↓

Notification

↓

Recovery

↓

Root-cause analysis

↓

Corrective action

The purpose is to ensure that an incident does not remain an isolated technical event but becomes part of the bank's risk-management and regulatory process.

24. Security Monitoring

Continuous monitoring can identify:

• abnormal transactions;
• unusual login patterns;
• unauthorized configuration changes;
• malware;
• suspicious network traffic;
• privileged-account misuse.

A Security Operations Centre (SOC) can integrate:

• logs;
• alerts;
• threat intelligence;
• endpoint information;
• network telemetry.

For banking infrastructure, monitoring should cover both cybersecurity events and operational failures.

25. Logging and Audit Trails

Electronic records are critical in banking disputes.

A robust audit trail should help establish:

• who accessed a system;
• when access occurred;
• what was changed;
• who authorised a transaction;
• which device was used;
• whether authentication succeeded;
• what system executed the transaction.

This has both:

security value

and

legal evidentiary value.

26. Operational Technology and Legal Responsibility

A bank may outsource a technology function, but outsourcing does not automatically eliminate the bank's regulatory responsibility.

For example:

Bank → Cloud Provider

If the cloud provider suffers an outage, the customer's relationship remains primarily with the regulated bank.

Therefore, the bank must understand:

• the service dependency;
• contractual protections;
• recovery capability;
• incident-reporting obligations;
• alternative arrangements.

This is one of the reasons CORF specifically addresses third-party risk.

27. Cybersecurity and Operational Technology

Cybersecurity protects OT systems from:

• ransomware;
• malware;
• unauthorized access;
• destructive attacks;
• credential compromise.

But OT security also asks:

What happens if the system is unavailable?

Therefore:

Cybersecurity = protect the system

while

Operational resilience = protect the service even when the system is disrupted.

28. Regulatory Compliance

CBK's 2020 framework already treated Technology and Operations as a core cybersecurity domain. CBK's published financial-stability material reported a 2021 sector-alignment score of 2.87/3.0 for that domain during the first implementation cycle.

The 2025 CORF subsequently broadened the regulatory focus from cybersecurity controls to resilience.

This represents a significant development:

2020: "Is the bank secure?"

2025 onward: "Can the bank remain secure and continue operating despite disruption?"

29. Case Law: Important Qualification

There is an important limitation concerning case law.

CORF was only issued in December 2025, so there is not yet a substantial body of published Kuwaiti Court of Cassation decisions specifically interpreting CORF or its OT-security controls.

Accordingly, it would be inaccurate to manufacture cases describing courts as having interpreted CORF.

The more legally sound approach is to use established Kuwaiti banking cases involving authorization, forged payment instructions, banking records and allocation of responsibility and explain their relevance by analogy to modern infrastructure security.

For formal legal work, the original Arabic judgment should be checked against an authoritative Kuwaiti law reporter.

30. Case 1 — Kuwait Court of Cassation, Commercial Appeal No. 37/2005

Judgment: 31 January 2006

Facts/issue

The reported dispute concerned a cheque bearing an allegedly forged customer signature.

Principle

The legal question was whether the payment could properly be attributed to the customer when the signature was not genuinely authorized.

Banking-security relevance

The traditional banking question was:

Is this signature genuinely the customer's?

The modern technological question becomes:

Is this digital authentication genuinely attributable to the customer?

Thus, the underlying principle remains important for:

• stolen credentials;
• compromised OTPs;
• account takeover;
• electronic signatures;
• fraudulent payment instructions.

Secondary reporting identifies the case as a Kuwaiti banking authority concerning forged customer signatures and allocation of responsibility.

31. Case 2 — Kuwait Court of Cassation, Commercial Appeal No. 424/2001

Issue

The reported authority concerned disputed banking transactions involving allegedly forged customer authority.

Principle

There is a legal distinction between:

genuine authority

and

an instrument or instruction that merely appears to be authorised.

OT-security relevance

A system should not treat a technically valid login as the complete answer to authorization.

A secure transaction architecture should establish:

Identity → Authentication → Authority → Transaction → Audit trail

The case is therefore useful when analysing modern digital-payment attribution.

32. Case 3 — Kuwait Court of Cassation, Commercial Appeal No. 430/2001

Issue

The reported case involved disputed payment instructions and questions concerning genuine customer authority.

Principle

Authority to operate an account and the validity of payment instructions are legally significant.

Modern relevance

This is directly analogous to digital banking where:

• an employee has system access;
• an API has technical access;
• a fintech has delegated access;
• but the legal mandate may impose restrictions.

A technologically possible transaction is not necessarily a legally authorized transaction.

The case is reported in secondary Kuwaiti banking-law sources as an authority concerning disputed payment authority.

33. Case 4 — Kuwait Court of Cassation, Commercial Appeal No. 1838/2023

Judgment: 28 December 2023

Issue

The reported dispute concerned bank transfers allegedly executed without the signatures required from authorized persons.

Principle

Account mandates, authorization requirements and banking records can be central in determining whether transfers were properly executed.

Infrastructure-security relevance

A corporate digital-banking platform should preserve the customer's legal authorization structure.

For example:

Maker

↓

Checker

↓

Authorized signatory

↓

Payment execution

An IT system should not allow technology to bypass legally required approval levels.

The case has been reported as involving disputed transfers and authorization requirements.

34. Case 5 — Kuwait Court of Cassation, Commercial Appeal No. 1809/2023

Judgment: 28 December 2023

Issue

The reported litigation concerned disputed banking transfers and the evidence concerning their authorization.

Principle

Transaction records and evidence of proper authorization can be significant in determining responsibility.

Relevance to OT security

This supports the importance of:

• immutable logs;
• authentication records;
• authorization records;
• transaction timestamps;
• system audit trails.

In a cyber incident, the bank must be able to reconstruct the transaction chain.

35. Case 6 — Kuwait Court of Cassation, Appeal No. 1251/2009

Judgment: 22 March 2011

Issue

The reported case concerned a cheque carrying a forged drawer signature and the allocation of responsibility.

Principle

The analysis of responsibility can involve both:

• the bank's conduct; and
• the customer's conduct.

The reported authority discusses Article 523 of the Commercial Law and circumstances in which customer fault can become relevant to allocation of loss.

Digital-security relevance

The same analytical structure can arise in an electronic banking dispute:

Unauthorized transaction

Bank's security controls

Customer's conduct

Causation

↓

Allocation of responsibility

This is why banking cybersecurity cannot be reduced to the proposition that either "the bank is always responsible" or "the customer is always responsible."

36. Case-Law Principles

The cases collectively illustrate several important principles.

37. Security of Critical Payment Infrastructure

Kuwait's infrastructure is increasingly interconnected.

A simplified structure is:

Customer

↓

Bank

↓

Payment infrastructure

↓

CBK/payment systems

↓

Other bank / merchant / government entity

A failure at one critical point may have consequences beyond one customer.

Therefore, operational technology security has a systemic-risk dimension.

CBK's payment-system architecture incorporates secure communications and international payment standards, while the regulator states that it follows the BIS Principles for Financial Market Infrastructures.

38. Physical Security + Cybersecurity

Banking infrastructure requires a combined security model.

Physical threats

• fire;
• flooding;
• power failure;
• unauthorized entry;
• equipment destruction.

Cyber threats

• ransomware;
• malware;
• credential theft;
• denial-of-service attacks;
• system compromise.

Operational threats

• configuration errors;
• software failures;
• human error;
• vendor outages.

Operational resilience must address all three.

39. Incident Example

Consider a hypothetical Kuwaiti bank.

Its core payment environment becomes unavailable because of a ransomware attack.

Legal/security response

1. Detect

Security monitoring identifies abnormal activity.

2. Contain

Affected systems are isolated.

3. Continue

Critical services move to alternative infrastructure.

4. Notify

Relevant internal and regulatory escalation processes are activated.

5. Recover

Systems are restored from verified backups.

6. Investigate

Logs determine the attack path.

7. Remediate

The vulnerability is eliminated.

8. Test

Recovery controls are tested again.

This is the essence of operational resilience.

40. Role of Employees

Employees remain a significant component of infrastructure security.

Banks therefore need:

• security awareness;
• privileged-user controls;
• segregation of duties;
• background and access controls where appropriate;
• phishing awareness;
• incident-reporting procedures;
• periodic training.

CBK itself has continued to invest in cybersecurity leadership and professional capability within the banking sector. In May 2025, CBK announced the fifth edition of its Cybersecurity Leaders Programme.

41. Artificial Intelligence and Banking Infrastructure

AI introduces additional security considerations.

Potential applications include:

• anomaly detection;
• fraud detection;
• threat detection;
• automated monitoring.

But risks include:

• incorrect automated decisions;
• model manipulation;
• data poisoning;
• excessive dependence on automated systems;
• insufficient human oversight.

Therefore, AI should be treated as another component of the operational-risk environment rather than automatically regarded as a security solution.

42. Key Legal Duties of a Kuwaiti Bank

A resilient bank should be capable of demonstrating:

Governance

Who is responsible for infrastructure security?

Risk assessment

What could disrupt critical banking services?

Protection

What controls prevent or reduce those disruptions?

Detection

How quickly can incidents be identified?

Response

What happens when systems fail?

Recovery

How quickly can services return?

Testing

Has the bank actually tested the recovery plan?

Third-party management

Can outsourced providers be controlled and replaced if necessary?

These concepts are consistent with the resilience-first approach adopted by CBK in CORF.

43. Challenges in Kuwait

1. Increasing digital dependency

Banks increasingly depend on interconnected technology.

2. Third-party concentration

Several institutions may rely on the same technology provider.

3. Instant payments

Faster payments reduce the time available to detect suspicious activity.

4. Legacy infrastructure

Older systems may be difficult to integrate securely.

5. Cyber threats

Financial institutions remain attractive targets.

6. Physical infrastructure

Power, telecommunications and data-centre failures can disrupt banking without any cyberattack.

7. Cross-border technology

International providers can create additional legal and operational dependencies.

44. Difference Between Cybersecurity and OT Security

For banking, the two should not be separated completely.

45. Overall Legal Framework

The Kuwaiti framework can be represented as:

Law No. 32 of 1968

↓

CBK supervisory authority

↓

2020 Cybersecurity Framework

↓

Electronic/payment regulations

↓

Digital banking infrastructure

↓

2025 Cyber & Operational Resilience Framework

↓

Cyber Resilience + Operational Resilience + Third-Party Risk

↓

Continuous testing and supervision

The 2025 framework therefore represents an evolution rather than a completely separate regulatory regime.

46. Conclusion

Operational technology security in Kuwaiti banking infrastructure is now a central component of banking-law compliance and financial stability.

The legal framework has evolved from the traditional regulation of banking activities under Law No. 32 of 1968 toward increasingly detailed regulation of technology, cybersecurity, payment infrastructure and operational resilience.

The most important current development is the CBK Cyber & Operational Resilience Framework 2025, which expressly moves the regulatory model toward resilience: banks and other regulated entities are expected not merely to defend infrastructure but to anticipate, withstand, recover from and adapt to disruptions.

The principal legal principles are:

1. Banking technology remains subject to CBK supervision.
2. Security must cover both cyber and operational threats.
3. Critical payment infrastructure requires heightened protection.
4. Availability and continuity are as important as confidentiality.
5. Authentication must be connected to genuine legal authorization.
6. Digital banking systems must preserve account mandates and approval structures.
7. Audit trails are essential for both security and legal evidence.
8. Banks must manage third-party technology dependencies.
9. Business continuity and disaster recovery are core components of resilience.
10. Security controls must be tested rather than merely documented.

The Kuwaiti case law on forged cheques and disputed payment authority is not direct jurisprudence on modern OT security or CORF, but it provides an important underlying legal principle: the technological appearance of an authorized transaction does not by itself resolve the question of genuine authority and responsibility. That principle is highly relevant as banking moves from handwritten signatures to passwords, biometrics, APIs and automated payment systems.

For an academic answer, the strongest formulation is therefore:

Kuwaiti banking law increasingly treats technology security not as a purely technical matter but as an element of prudential supervision, operational continuity, payment-system integrity and customer protection. The 2025 CORF is the clearest expression of this resilience-based approach.