The most effective approach involves directly addressing the identified vulnerabilities and selecting an architecture that balances security with performance. Implementing security patches and updates is the direct and fundamental mitigation for the "outdated software" vulnerability. A hybrid cloud topology is the best choice for a new core banking system because it allows the financial institution to host sensitive customer data and core processing on a highly secure private cloud, while leveraging the scalability and cost-effectiveness of a public cloud for less sensitive, high-transaction-volume services like web front-ends or analytics. This model optimally addresses the dual requirements of high security and handling a large number of transactions.

B. Installing antivirus software is a general security measure, not a direct mitigation for outdated software or weak passwords. On-premises topology can be secure but often lacks the flexibility and scalability required for modern high-volume transaction systems.

C. While creating strong password policies is a correct mitigation for that specific vulnerability, using a pure public cloud for a core banking system is often unsuitable due to regulatory compliance and data sovereignty concerns for highly sensitive financial data.

D. Security audits and penetration testing are detective controls used to identify vulnerabilities, not the mitigation process itself. The mitigation is the action taken in response to the findings, such as patching.

1. National Institute of Standards and Technology (NIST). (2020). Security and Privacy Controls for Information Systems and Organizations (Special Publication 800-53, Revision 5).

Section: Control SI-2 Flaw Remediation.

Content: This control explicitly requires organizations to "identify, report, and correct information system flaws" and "install security-relevant software and firmware updates within the organization-defined time period." This directly supports "implementing security patches and updates" as the correct mitigation for outdated software.

2. National Institute of Standards and Technology (NIST). (2011). NIST Cloud Computing Reference Architecture (Special Publication 500-292).

Section: 5.3 Cloud Deployment Models.

Content: The document describes a hybrid cloud as a composition of two or more clouds (private, public) that allows for data and application portability. This architecture enables an organization to "keep the critical applications and data in a private cloud" for security and control, while using a public cloud for other needs, which aligns perfectly with the requirements of a financial institution.

3. Furht, B., & Escalante, A. (Eds.). (2010). Handbook of Cloud Computing. Springer Science & Business Media. (Reputable academic publisher, often used in university courseware).

Chapter: 26, Cloud Computing in Banking.

Content: This chapter discusses the architectural choices for banks adopting cloud technology. It highlights that a hybrid model is often preferred, stating, "A hybrid model allows a bank to keep customer data and other sensitive information on a private cloud... while using a public cloud to interact with customers." This supports the selection of a hybrid topology for balancing security and scalability.