hardMultiple Choice
CISM Practice Question: A financial institution is integrating a newly…
A financial institution is integrating a newly acquired fintech startup. The startup has a very different security culture. What governance approach best ensures integration without stifling innovation?
⚠ Common exam trap
CISM often tests the tension between security rigor and business enablement, so the trap is choosing the strictest-sounding option (immediate full adoption) instead of the balanced, risk-based governance answer that preserves business value.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Use a transitional risk-based approach, phasing in critical controls while allowing flexibility
A transitional, risk-based governance approach lets the acquiring institution phase in critical security controls (e.g., identity, data protection, logging) while preserving the startup's agile practices in lower-risk areas. This balances the need for enterprise-wide risk alignment with the reality that abrupt policy imposition damages culture and velocity. It is the standard M&A security integration pattern recommended by ISACA and similar bodies.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Allow the startup to maintain its own security policies indefinitely
Why it's wrong here
Indefinite autonomy leaves the startup outside the institution's governance, so enterprise risk and regulatory obligations are never applied to it. It is tempting because it preserves the startup's culture untouched, and would be correct for a loosely coupled subsidiary with no shared data, systems or regulatory perimeter.
- ✗
Force the startup to adopt all of the institution's policies immediately
Why it's wrong here
Immediate wholesale adoption imposes the institution's control set on the startup's differing culture, which suppresses the innovation the acquisition was meant to retain. It is tempting because rapid standardisation is defensible for regulated entities, and would be correct where the acquired unit poses unacceptable risk and integration speed outweighs cultural preservation.
- ✓
Use a transitional risk-based approach, phasing in critical controls while allowing flexibility
Why this is correct
A transitional risk-based approach phases in critical controls according to actual risk exposure while permitting flexibility elsewhere, satisfying the stem's dual constraint of integrating the fintech's differing security culture without stifling the innovation the acquisition was made for.
- ✗
Create a separate security team for the startup
Why it's wrong here
A separate security team creates parallel governance and duplicate control frameworks rather than one integrated approach, so accountability and risk reporting fragment. It is tempting because it shields the startup's working style, and would be correct where the unit operates under a distinct regulatory regime requiring dedicated oversight.
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About these practice questions
One of 924 original CISM practice questions on Courseiva, each with a full explanation and wrong-answer analysis — not exam dumps or protected exam content. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
This CISM practice question is part of Courseiva's free ISACA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CISM exam.