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The expansion of technology brings a plethora of opportunities and benefits for companies. At the same time, it poses additional threats to the safety of their data. Hackers are constantly on the lookout for new ways of accessing sensitive information. In 2022 alone, nearly 500 million ransomware attacks were detected with an average cost amounting to $4.5 million. Every day, over 3.4 billion phishing emails are being sent to recipients worldwide. Simply installing an antivirus and hoping for the best is not enough to safeguard your data. In order to protect your business from devastating data losses, expenses, and lawsuits, you need to implement a comprehensive cybersecurity risk management strategy. In this article, we will discuss what is cybersecurity risk management, explore its benefits, and learn how to create a bulletproof strategy.

What is Cybersecurity Risk Management?

Cybersecurity risk management is a continuous process of detecting, evaluating, analyzing, and mitigating various cyber threats within an organization. As technology grows and evolves, new security risks emerge that need addressing and battling. For this reason, cybersecurity risk management cannot be a one-time procedure but an ongoing process. While new potential threats appear, cybersecurity experts research them to stay ahead of the criminals. 

Especially for companies that still operate with legacy software and hardware, having a continuous cybersecurity risk management plan is a number one priority. A cybersecurity manager is tasked with monitoring and assessing the health of the company’s devices and applications. From updating configurations to ensure they prevent threats to switching the systems when they become obsolete, your IT experts focus on establishing cybersecurity procedures across the organization. 

Besides software and hardware monitoring, a cybersecurity officer is in charge of educating employees to prevent breaches and leaks. Every company needs to have a set of guidelines and policies in place that protect its assets. It’s the cybersecurity professional’s duty to come up with strategies that help identify, analyze, mitigate, and avoid risks associated with cybercrime. 

Benefits of Cybersecurity Risk Management Practices

The importance of risk management in cyber security cannot be overstated. A well-crafted cybersecurity risk management strategy can aid companies in gaining a deeper understanding of their threats. Assessing your infrastructure will reveal potential vulnerabilities that might be exploited by cybercriminals. These findings will also facilitate a proactive approach to cyber-attacks. Instead of dealing with serious matters as they happen and experiencing downtime, businesses shift to a preventative strategy. This includes creating a robust response plan that allows organizations to minimize the negative impact. 

Finally, a cybersecurity risk management strategy can lower or even eliminate unnecessary spending. Salvaging a business after a data leak is an expensive endeavor. Not only will you lose money from downtime, but you also might be forced to pay fines, reparations, system upgrades, IT experts’ rates, and more. Additionally, if a hacker manages to steal your data, they may use it to transfer funds from your accounts. Creating and following a cybersecurity risk management strategy can aid you in minimizing monetary losses. 

When is Cyber Risk Management Relevant to Your Business?

As the complexity of cyber attacks grows, so do the countermeasures. In this environment, cyber threats need to be proactively managed and mitigated to avoid data leaks. In this section, we will focus on concrete scenarios when your risk of exposure increases.

Cybersecurity risk management

Internet of Things (IoT)

The interconnectedness of IoT comes at a high price of potential exposure to people with bad intentions. IoT devices offer organizations access to real-time data which helps them to make well-informed decisions and take proactive actions. Unfortunately, this also exposes their valuable data to hackers. On top of that, breaking into one device gives cybercriminals a gateway to all of the interconnected sensors. This can pose a serious threat to the company’s security. 

Remote Work

Although the growth of remote work has leveled the playing field for many people, the home office environment can be detrimental to the safety of your data. The speed with which millions of people shifted towards remote work has led to a gap in cybersecurity guidelines. As a result, businesses across the world are at risk of exposing their valuable information. On top of that, many people prefer to use co-working spaces and cafes to perform their duties which introduces an even higher risk of data leaks. Accessing unsecured and public Wi-Fi networks poses a threat to the safety of their devices. 

Cloud Migration

In recent years, more and more businesses felt the need to move their data to a cloud service to gain various benefits. Cloud migration gives them the desired cost savings, scalability, optimized management, and backup plans. However, moving data to the cloud can be a risky process. Without a comprehensive set of IT security guidelines, you are at risk of exposing your data to people with bad intentions. Since cloud providers cannot be accountable for the integrity of your data, this responsibility falls on your team. 

Sophisticated Ransomware

According to Microsoft’s 2021 Digital Defense Report, ransomware attacks currently pose the greatest risk to organizations. Hackers go after high-value data owned by businesses and hold it for ransom for financial gain. With ransomware crime on the rise, companies require more sophisticated cyber security risk management tools and rules. 

Artificial Intelligence 

Much like any other advanced technology, AI can be used for good and for bad. Cybercriminals can utilize the latest developments in artificial intelligence to mimic someone’s voice patterns and trick their colleagues into disclosing valuable information. Hackers can also deliver more effective social engineering strategies using AI-powered software. Furthermore, they can reverse engineer an AI system to gain access to confidential data. 

Risks of Non-compliance

Complying with data protection laws is mandatory for businesses regardless of the industry or size. The risks of non-compliance are too high to accept and include devastating financial and reputational losses. Without a detailed cybersecurity risk management plan, you are bound to overlook important aspects. 

Natural Disasters

Even in an ideal crime-free world, businesses can be susceptible to data losses due to natural disasters like earthquakes and hurricanes. In case of a power outage, you need to have a strategy in place to protect your data from being lost or compromised. Moreover, there is a correlation between natural disasters and spikes in cybercrime. Working out plans and guides on mitigating hacker attacks during such difficult times will allow you to protect sensitive information. 

Human Error

Stanford University research shows that 90% of data breaches occur due to human error. They discovered that nearly half of the respondents fell victim to a phishing attack. Either through perceiving the email as legitimate or mistaking it for correspondence from a senior executive, employees are often unaware of cybersecurity risks. Human error also includes setting a weak password, downloading an unsecured file, and more. 

Insider Threats

Unfortunately, risks sometimes come from within the company. It could be a disgruntled employee or business partner, or anyone else who has access to the business data and some vendetta against the company. IT security risk management policies help organizations identify potential vulnerabilities and observe employee behavior to detect possible insider threats. Using AI-powered tools, companies can be alerted whenever suspicious behavior occurs. 

The Cybersecurity Risk Management Process

The cyber security risk management process is integral to any successful IT security strategy. Consisting of a few vital steps, this process will reveal the biggest vulnerabilities of your software and hardware. Pinpointing the most dire risks will allow your team to prepare a comprehensive strategy to safeguard your business data. Here is a concise guide to the cyber security risk management process:

Cybersecurity risk management

Perform an Internal Audit

Before identifying potential threats, you should focus on learning how data is collected and stored across the organization. Besides listing digital assets and locating business and customer data, this step includes calculating the cost for recovery. Conducting an audit will help you learn the infrastructure of the company and estimate the potential monetary losses that a compromised file will bring. 

Define the Scope

Depending on the size of your organization, you may be working with a small scope like a network segment or an entire system. The larger bite you want to take, the more complex a challenge you will be faced with. You can base the scope on the outcomes of the internal audit that will help you understand how to protect your business. 

Examine Assets

The next step involves detecting the most vulnerable devices and services that require the utmost protection. These are usually the systems that run or support mission-critical processes. Common examples include networks, applications, workstations, and systems that malicious actors may target. Other vital digital assets expand to the company’s and employees’ social media and email accounts, crypto assets, security tokens, and more. 

Identify Threats

The next step in the risk management process in cyber security is studying each asset and identifying all threats associated with it. After establishing each threat, assign a risk level to it to create a prioritized list. With the recent surge in data leaks, malware, ransomware, and other cybercrime, it’s imperative to recognize and acknowledge each potential threat to the organization. 

Analyze Threats

Investigate each threat in detail to understand its potential impact and point of entry. Besides assessing the digital assets, it’s also crucial to determine who might want to attack your system. Knowing which actors may penetrate your business and through what means will help you in creating a more comprehensive strategy. 

Calculate the Impact

Go through your threat list to identify the exact impact of each item. In other words, what would and could occur in case this particular threat becomes a reality. Knowing what to expect from an attack will help you in determining the set of actions to minimize the harm. 

Create Solutions

While some risks are low enough to be left unaddressed, others need solutions to prevent or mitigate them. Depending on the threat level established before, create strategies to minimize the impact of each risk:

  • Application security: Conduct continuous security testing during development and onwards to avoid vulnerabilities in the production stage.
  • Endpoint security: Endpoint devices are servers and workstations. You can take preventative measures to protect these devices from attacks and unauthorized access. 
  • Network security: Monitor network traffic to identify potential attackers and adopt systems and policies to block and filter unwarranted traffic. 
  • Cloud security: Track security configurations in the cloud to detect vulnerabilities and protect your data. 

Employ Specialized Automation Tools

There is a plethora of automation tools available to streamline the risk management process in cyber security and make it more efficient. AI-powered technology can also help in identifying hidden threats and vulnerabilities that might not be apparent to your team. On top of that, such systems will save you time and money as well as reduce human error. 

Educate Employees

You will not regret investing in cybersecurity awareness across the organization. No matter how great your IT team is, if employees are not educated on types of attacks, you are in danger of cybercrime. A single click on a phishing link is enough to put the entire business in jeopardy. Conduct training sessions to teach your employees how cyberattacks occur, their impact, and mitigation strategies. 

What is a Cyber Security Risk Management Framework?

A cybersecurity risk management framework is a set of guidelines and rules that assist businesses in recognizing and mitigating risks. Instead of shooting in the dark and trying to reinvent the wheel, companies can rely on an expert list of steps to keep their business safe. From identifying threats and analyzing their impact and probability to developing strategies and monitoring the aftermath, such frameworks act as a cybersecurity roadmap. 

Among the most common cybersecurity risk management frameworks are the following:

  • ISO/IEC 27001 is an international framework that provides a systematic approach to recognizing and dealing with various IT security risks within the organization. 
  • NIST Cybersecurity Framework offers expert-level guidelines and best practices to manage and prevent cybersecurity risks. 
  • Factor Analysis of Information Risk (FAIR) is a framework that utilizes mathematical models to calculate the probability and impact of each threat. 

Best Practices for a Cybersecurity Risk Management Strategy

Cybersecurity risk management is a complex discipline that requires an in-depth understanding of your infrastructure, current cyber threats, and data protection laws. Explore the best practices for a successful strategy to create a long-term, resilient approach.

Cybersecurity risk management

Establish a Risk Management Culture 

With the average cost of a cyberattack rising to $4.5 million, a well-crafted cybersecurity risk management strategy is an absolute must. One of the most foundational principles of such a strategy is an organization-level risk management culture. Encourage your IT team and executives to develop a set of guidelines to facilitate a safe office. Through their own examples, your stakeholders should communicate certain expectations around data protection. For instance, employees cannot leave their workspace without locking the screens of their workstations. These guidelines should be regularly explained and elaborated during various training sessions and onboarding procedures.

Comply with Data Protection Laws

Depending on the location of your business and user base, you are expected to comply with various types of data protection laws. The requirements also vary from industry to industry, with some sectors enforcing even stricter rules like HIPAA in healthcare. General data protection laws include GDPR in Europe, PIPEDA in Canada, LGPD in Brazil, and others. These laws enforce a set of guidelines aimed at protecting sensitive data. The regulations revolve around transparency, storage, confidentiality, accountability, and more. The consequences of non-compliance are detrimental to the organization’s finances and reputation and may even carry criminal charges.

Share Responsibility Across the Organization

Unfortunately, non-tech-savvy people are often uneducated about the importance of risk management in cyber security. You cannot solely rely on your IT team to enforce specific rules to minimize threats. Including other personnel in the process will help you educate them about the impact of cybercrime as well as allow them to make informed decisions. The lack of understanding of social engineering, phishing, various types of malware, and other threats leads to poor cyber hygiene. When you teach your staff about the implications of clicking random links in their inbox, they are more likely to be vigilant in the future. 

Invest in OPSEC

Amidst the rising threat of whaling attacks, businesses are recommended to invest in Operational Security (OPSEC). A whaling attack is targeted towards high-level executives who have access to sensitive information. Using information from public sources like LinkedIn, cybercriminals learn personal insights about the company’s CEO, CFO, etc. This data allows them to craft personalized attacks that appeal to a specific individual. Hackers then pose as corporate officers or other executives to manipulate their victims into disclosing confidential information or even transferring funds. 

OPSEC is a cyber security risk management strategy that aids companies in facilitating a safer environment. OPSEC can help you identify scenarios that seem innocent and coincidental but may in fact be a cybersecurity threat. The strategy allows IT experts to view their systems through the lens of an attacker. By monitoring social media and implementing best practices, you can significantly minimize the chances of a cyberattack.

Increase Transparency 

Your cybersecurity policies and metrics should be shared across the organization to ensure everyone’s awareness. Through data-sharing tools like dashboards and reports, make sure to keep everyone informed about the current state of the IT security plan. Stakeholders who make critical decisions across the company should be especially aware and educated about the metrics. Consider software solutions that optimize the data-sharing process and simplify technical jargon for non-tech employees. 

Adopt a Cybersecurity Framework

As already mentioned, cybersecurity frameworks help businesses to adopt and adhere to industry standards. Frameworks like ISO 27001, NIST, FAIR, and others provide a streamlined and well-defined scope of regulations to ensure data safety. Relying on these guidelines will simplify the transition period and help instill company-wide security policies. 

Implement Continuous Risk Assessment

To always stay ahead of the curve, you need to implement a continuous risk monitoring and reassessment process. Identifying, analyzing, prioritizing, and resolving IT security threats should become a part of your routine. Without knowing what can be jeopardized and in which way, you won’t be safe and prepared. 

Enforce Ongoing Monitoring

Unfortunately, risk management is not a one-time procedure. As cybercriminals continue to discover with new methods of stealing data, businesses have to adopt more sophisticated cybersecurity policies and tools. It’s recommended to continuously monitor potential risks within your organization and vulnerabilities associated with vendors, suppliers, and partners. Additionally, conduct regular audits to make sure your technology meets the latest security standards.

Include Various Stakeholders

Don’t hesitate to include different people in your cyber security risk management strategy. IT professionals offer highly important insights coming from expertise and in-depth understanding. However, people with malicious intent may have different points of view, backgrounds, and experiences. Involving team members from other departments may help you in discovering more potential scenarios and covering all your bases. 

Draft an Incident Response Plan

An integral part of IT security risk management, an incident response plan is a set of instructions that detail how the organization must respond in case of a data breach or cyberattack. This document should specify the roles and responsibilities of each actor and include step-by-step instructions. Even a small incident may eventually snowball into a big issue that jeopardizes the company’s reputation. Take your time to prepare a comprehensive document that addresses as many scenarios as you can think of. 

Consider Third-Party Risks

Third-party vendors may also inadvertently expose you to additional cyber threats. Using external vendors and services like VPN has become a norm. VPN services can provide an additional security layer, especially for remote workers, and protect your sensitive data. The technology is also a great extension if your employees travel to clients’ locations and need to connect to public Wi-Fi networks. 

However, you need to do your due diligence before entrusting your data to a third-party provider. This process is known as vendor risk management. The first step is to do thorough research when looking for a potential vendor to avoid unfortunate partnerships. Other methods include setting contractual standards, conducting audits and reports, and carrying out standardized onboarding processes. 

Conclusion

If you want to protect your business from malicious actors, consider investing in IT security risk management. With the right IT partner, you can ensure the safety of your business and customer data and focus on mission-critical goals. NIX is a software development company with years of experience and multiple cybersecurity success stories. We are devoted to delivering the best outcomes to our clients by offering a customer-oriented business model. Get in touch with NIX to discuss your needs and create a custom solution.

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