Organizations today are at greater risk of a cyberattack than ever before, and that risk will only grow as new technologies are introduced in coming years. That means ever greater importance for cybersecurity risk management – the process of identifying, analyzing, prioritizing, and mitigating cybersecurity risk.
Ideally your cybersecurity risk management program should locate and protect your organization’s most critical IT assets from cybersecurity threats: the malicious acts that endeavor to exfiltrate data, inflict harm, or disrupt operations by exploiting vulnerabilities in your IT systems.
In this article we’ll take a closer look at the cybersecurity risk management process, starting with how to prioritize cybersecurity risks and then the steps you can take to create a cybersecurity risk management framework that works for your business.
What Is Cybersecurity Risk?
Before we introduce cybersecurity risk, let’s first define a few terms that are often used interchangeably: threats, vulnerabilities, and risks. Although these terms do overlap and entwine, they each represent something different in cybersecurity.
A threat generally involves a malicious act that aims to destroy your sensitive data, inflict harm on your organization, or disrupt your operations. Some of the most common cybersecurity threats today are ransomware, phishing and malware. Most organizations will experience at least one of these threats in their lifetime.
Vulnerabilities are flaws in an IT system that leave it exposed to potential attack. They exist in all IT systems. In applications, vulnerabilities can often be patched by the manufacturer to harden and prevent exploitation of the weakness.
To protect your organization from cybersecurity threats and prevent your vulnerabilities from being exploited, you’ll need to determine the potential impact a successful cyberattack might have on your organization combined with the likelihood that such an attack would occur. This calculation is called cybersecurity risk, or the likelihood that your organization will suffer from disruptions to data, finances, or online business operations.
This is the risk most often associated with data breaches – security incidents that on average cost $4.24 million to remediate in 2021. In addition to the financial risk associated with cybersecurity, organizations also need to consider the reputational and regulatory consequences associated with security incidents.
As industry standards and compliance regulations for strong cybersecurity keep shifting, it’s more important than ever for your organization to understand the cybersecurity risk management process so you can predict and prioritize information security risks to protect your organization from future cyberattacks.
A robust cybersecurity risk management strategy includes adopting a systematic, disciplined cybersecurity plan and using a methodology to secure your vital infrastructure and information systems. Ultimately, your program will need to include specific policies and procedures for each risk you face, with the goal of reducing your company’s exposure to cyberattacks.
Creating, implementing and maintaining a cybersecurity risk management program is far from easy. It can be a time-consuming and expensive process. For this reason and more, many organizations turn to external companies to provide real-time metrics for their enterprise. In the end, this approach is often more cost-effective than attempting to take on the task internally.
How Do You Prioritize Cybersecurity Risk?
As we mentioned in the previous section, threats, risks and vulnerabilities are not the same. Still, these three elements can be combined to quantify the cybersecurity risk you face.
To calculate cyber risk, many use this simple framework:
Cyber Risk = Threat x Vulnerability x Information Value
Once you’ve calculated your cyber risk, you can begin to prioritize the security measures that will deliver the greatest improvement on your organization’s cybersecurity.
Before you begin those calculations, however, you need to complete some of the other steps in the cybersecurity risk management process. Let’s take a closer look at the steps necessary to create and maintain an effective cybersecurity risk management program.
The Cyber Risk Management Process
Before we review the cybersecurity risk management process, understand that there is no one-size-fits-all approach to cybersecurity. The following steps are intentionally general, so that any reader can fine-tune them to meet the specific needs of your organization.
Step 1: Set Yourself Up for Success
Begin by assembling the right team. These are the people who will be responsible for creating, implementing and maintaining your organization’s cybersecurity risk management process, so select them carefully.
Ideally, your team should include senior management, a compliance officer, departmental or operating unit managers, and any other IT or information security professionals who should be involved.
Next, set specific objectives for cybersecurity risk management with your team. To help you set these objectives, use existing cybersecurity frameworks. Probably the most important and widely recognized cybersecurity framework in the United States is the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF).
The NIST framework covers five broad domains: identify, protect, detect, respond, and react. It is designed so that organizations can measure the relative security and level of compliance provided by their existing cybersecurity architecture.
NIST is also a great source of white papers and publications that can help you first to develop a cyber risk assessment, and then to create a cybersecurity risk management strategy. Before you perform a cyber risk assessment, you’ll also need to decide which metrics you’ll use to measure risk. Most risk assessments use qualitative high-, medium-, and low-risk measurements to calculate risk, but quantitative metrics including statistical analysis are becoming increasingly popular.
Step 2: Conduct a Cybersecurity Risk Assessment
After you set yourself up for success, the first formal step in the cybersecurity risk management process is a cybersecurity risk assessment.
The purpose of a cyber risk assessment is to identify and analyze your cybersecurity risks, to help inform stakeholders and decision-makers about the issues your organization faces and what a good response might be. Cyber risk assessments also provide an executive summary to help stakeholders make informed decisions about which security measures should be taken to combat identified risks.
As mentioned above, you’ll use either quantitative or qualitative measurements to calculate risk. The following steps for a risk assessment assume that your organization will use high/medium/low metrics.
For more information on how to use statistical analysis to measure cyber risk, check out this other post.
Here are the steps that are most often taken during a cybersecurity risk assessment:
Determine information value. First develop a standard for determining the importance of an asset, so you can limit the scope of the assessment to the most business-critical assets. Then use the standard metrics to classify each asset as critical, major, or minor. (The NIST CSF can help with this.)
Identify and prioritize assets. Next, identify your assets and determine the scope of the assessment. You won’t need to assess every single asset because they don’t all have the same value. Start with your most valuable assets and work your way down the list.
Identify cyber threats. Look for threats that could harm your organization. Start with “bad actors” who might exploit vulnerabilities, where the threats might be hackers, malware, man-in-the-middle attacks, and so forth. Also include other threats such as natural disasters, negligent or malicious employees, and third-party vendors. After you identify cyber threats, you’ll also need to assess their potential impact.
Identify vulnerabilities. A vulnerability assessment is a systematic review of the security weaknesses in your information systems. It aims to evaluate whether your system is susceptible to any known vulnerabilities, assigns a severity level to each one, and recommends remediation. You can also find known vulnerabilities through audit reports, vulnerability databases, vendor data, incident response teams, and software security analytics.
Analyze and implement security controls. Determine which security controls are already in place and whether they’re working effectively to reduce risk. Security controls could be technical controls (hardware, software, encryption, intrusion detection mechanisms, multi-factor authentication, automatic updates, continuous leak data detection) and nontechnical controls (security policies, physical mechanisms like locks or keycard access, and so forth). Then classify and categorize your controls as either preventative (which attempt to stop attacks before they happen) or detective (work to discover when and how an attack has occurred).
Prioritize risks. Prioritize your risks based on the cost of prevention versus information value. This will help the organization decide what actions to take to reduce cyber risks, including the possibility of taking no action at all because the cost isn’t worth the effort.
One possible priority scale:
- High risk: take corrective measures as soon as possible
- Medium risk: implement corrective measures within a reasonable period of time
- Low risk: decide whether to accept the risk or mitigate it.
Document results. Develop a risk assessment report to help make decisions about budget, policies and procedures. In this report, describe the risk, vulnerabilities and value for each threat, and the impact and likelihood of occurrence and control recommendations.
Once you’ve completed a cybersecurity risk assessment and documented the findings, it’s time to turn them into a cybersecurity risk management strategy that is reflected in your comprehensive cybersecurity risk management program.
Step 3: Mitigate Risks
Once the cybersecurity risk assessment is done, your team can begin to mitigate the most pressing risks (based on whatever decisions senior management makes once they’ve read your risk assessment report).
Mitigation can be done with technology, such as encryption, firewalls, threat hunting software, and engaging automation; as well as best practices for employees, including:
- Cybersecurity training programs.
- A patch management program.
- Identity and access management.
- Multi-factor authentication.
- Dynamic data backup.
An important part of risk mitigation is incident response, and specifically an incident response plan. For instance, what will your organization do in the event of a data breach? Who will be responsible for contacting affected customers? How will you assure that the event won’t happen again? For all of your most pressing risks, the company should have a written response plan that will guide employees through specific steps they should take to resume normal operations as quickly as possible.
The risk that remains after applying all the possible mitigation measures is called residual cybersecurity risk. To deal with this residual risk, you have two choices: learn to live with it (accept the risk), or transfer it to an insurance provider who will absorb that risk for a fee.
Step 4: Continuously Monitor
The risk management process isn’t over after you’ve identified, assessed, prioritized, and mitigated cybersecurity risks. Your security team will also need to monitor your IT environment to assure that your security controls are working.
Here are some things your organization should monitor:
- Regulatory change. Keep up to date with any changes to compliance obligations or industry standards, to assure that your security controls align with outside expectations.
- Vendor risk. A third-party risk management program is also a must, if you don’t already have one in place. You’ll need to assess and document your security and compliance controls each time you onboard a new vendor and you’ll need to monitor those vendors throughout the vendor lifecycle.
- Internal IT usage. To stay ahead of potential gaps in your security, you should know what technology your internal teams use and how they use it. Account for new technology anytime there is a change to a workflow or process.
Step 5: Choose Tools to Help
For most organizations, the cybersecurity risk management process is overwhelming. It’s expensive, time consuming, and resource intensive. For this reason, many organizations opt to skip the process entirely. Given the possible costs of cybersecurity failure, however, that isn’t a viable long-term strategy.
Fortunately, governance, risk management, and compliance (GRC) software can help to automate the worst parts of the process for you.
Manage Cybersecurity Risks with Reciprocity ZenRisk
To stay ahead of ever-evolving security threats, you need a solution that can help you better manage risks and mitigate business exposure by providing you with greater visibility across your organization.
Reciprocity ZenRisk is an integrated cybersecurity risk management solution designed to provide you with actionable insights to gain the visibility you need to stay ahead of threats and communicate the impact of risk on high-priority business initiatives. Turn the unknown into quantifiable and actionable risk insights with built-in expertise that identifies and maps risks, threats and controls for you, so you can spend less time setting up the application and more time using it.
A single, real-time view of risk and business context allows you to communicate to the board and key stakeholders in a way that’s framed around their priorities, keeping your risk posture in sync with the direction your business is moving.
Reciprocity ZenRisk will even notify you automatically of any changes or required actions, so you can be on top of your risk posture like never before. Eliminate time-consuming, manual work and streamline collaboration by automating workflows and integrating with your most critical systems.
Plus, Reciprocity ZenRisk is seamlessly integrated with Reciprocity ZenComply so you can leverage your compliance activities to improve your risk posture with the use of AI. Built on the Reciprocity ROAR Platform, the Reciprocity product suite gives you the ability to see, understand and take action on your IT and cyber risks.
Now, through a more active approach, you can give time back to your team with Reciprocity ZenRisk. Talk to an expert today to learn more about how the Reciprocity Product Suite can help your organization mitigate cybersecurity risk and stay ahead of threats.