Cybercrime is growing at an alarming pace. As the COVID-19 pandemic forced organizations to work remotely and digitize more business processes, criminals took that opportunity to launch ever-bigger and more sophisticated attacks. As a result, ransomware has jumped 62 percent across the globe since 2019, and North America alone has seen a 158 percent spike, according to the recent SonicWall Cyber Threat Report.
Companies must manage their cyber risk to guard against these potential threats and repel the barrage of threat actors. Doing so requires a robust cybersecurity risk assessment program to improve understanding of risk across your business, and to keep tabs on where and how these risks change.
In this guide we will define cyber risk and explain the benefits of effective cyber risk management. Then we’ll explore how to create a successful program to assess and respond to these risks while diving into ZenGRC, our cloud-based risk and compliance management solution.
To better understand cyber risk and learn how to assess and mitigate these risks successfully, read on.
What Is Cybersecurity Risk?
Cybersecurity risk is a form of business risk that refers to an organization’s exposure to potential losses – whether financial, reputational, operational, productivity-related, or related to regulatory compliance – as the result of a cyber attack or data breach.
Cybersecurity risks are related to cyber threats, which are the criminal actions that lead to attacks and data breaches. Cyber threats include ransomware, phishing, malware, third-party risks, internal risks, compliance failures, and more.
Everyone in an organization needs to be aware of cyber risks, best practices for protecting data, and proper incident response protocol. Your company’s cybersecurity program is only as strong as its weakest employee, because data breaches are most likely to come from human error. This means employees must understand cyber threats, realize the potential impact of a cyber attack on the business, and know the steps to reduce risk and prevent future cyber incidents.
While everyone in an organization must play a role in managing cybersecurity risk, leading these efforts is generally the job of an organization’s senior leadership, including the CEO and chief information officer, as well as company board members and other senior stakeholders.
Top-performing organizations typically have a chief information security officer (CISO), who directly oversees strategic, operational, and budgetary aspects of data management and information security. CISOs keep abreast of developing security threats, assure that network infrastructure is designed according to best-in-class security practices, mitigate risk, determine the cause when a breach occurs, and liaise with other leadership to guarantee that security initiatives receive necessary funding and attention.
Strong leadership is integral to building a successful cybersecurity risk management approach and fending off the many potential disasters associated with attacks. These risks include damage to data, equipment failure, lost income, extra expenses, increased lawsuits, breaches of confidential company and customer details, damaged brand reputation, and even increased extortion attempts.
Failure to manage these risks properly can be expensive. IBM pegs the average cost of a data breach at a whopping $3.86 million in 2020. Lost business accounts for nearly 40 percent of that total figure, or more than $1.5 million. This includes customer turnover, lost revenue due to system downtime, and the higher cost of acquiring new business after a breach damages an organization’s reputation.
What’s more, the average total cost of a data breach has increased by 10 percent since 2014, according to IBM. Clearly, the potential cost of failing to invest in best-in-class cybersecurity risk mitigation is too great for any organization to accept.
Cyberattacks & Cyberterrorism
Cyberterrorism can be defined as a premeditated attack by a nation-state or other politically motivated actor against information systems, programs, and data; with the intent to cause loss of life, severe disruption, or widespread fear. Any act of cyberterrorism is by default a cyberattack, but not every cyberattack is necessarily cyberterrorism. Criminals might be motivated purely by financial gain or the wish to create chaos.
Examples of cyberterrorism include:
- Targeting IT control systems with malware to disrupt utilities, transportation systems, power grids, or other critical infrastructure and create instability.
- Using sophisticated penetration methods to gain access to networks and steal sensitive data and high-value information around national defense, the financial industry, manufacturing, and more.
- Remotely accessing and altering the control systems of food processing plants or pharmaceutical manufacturers to sicken people; remotely accessing attack air traffic control systems to induce plane crashes; or using unauthorized access to inflict other forms of mass harm.
Cybercrime continues to increase year-over-year with no signs of abating. According to the HP Wolf Security Threat Insights Report, downloads of hacking tools from underground forums increased 65 percent from the second half of 2020 to the first half of 2021.
This increase in cybercrime produced a handful of high profile attacks in 2021. A major ransomware attack on Colonial Pipeline, the largest oil pipeline in the United States, led to major gas shortages and long lines at gas stations. Disruptive attacks also hit software company Kaseya, local governments, and the Republican National Committee.
Common Types of Cybersecurity Risks
The most common types of cybersecurity risks include the following:
- Malware attacks
- Third-party risks
- Internal risks
- Compliance failures
Short for “malicious software,” malware consists of code designed to cause extensive damage or gain unauthorized access to networks. Malware includes viruses, spyware, and ransomware. In 2020, some 5.6 billion (yes, with a “b”) malware attacks took place, according to SonicWall, including many that used more than 268,000 never-before-seen malware variants.
To guard against malware, companies must reduce the potential attack paths by limiting the number of servers exposed to the internet and staying on top of patch management. They must implement a strict network segmentation policy, which defines proper communication and alerts any communications outside of the norm, and use malware detection tools to detect attempts.
Businesses rely on third-party vendors to increase profitability and perform better. Because those parties operate as an extension of the organization, these vendors (whether in supply chain, internal operations, product manufacturing, or other departments) have access to privileged systems, and therefore present a potential threat.
To respond to the threat created by vendor risk, companies must maintain a centralized register of third parties. They must also implement risk management policies and assessments for vendors, customers, joint ventures, and any other entity that has access to sensitive information or intellectual property.
This type of risk reflects the potential of employees to leak internal data, whether purposely or accidentally. This can occur by visiting an unsafe website, sharing passwords or confidential information, using unauthorized devices, or even physical theft of employees’ company devices.
Implementing data protection tools can help companies monitor activity related to device use and file access to better control the information that leaves a company and to reduce Internal threats.
Non-compliance issues across a company’s IT infrastructure can include out-of-date software, subpar security or firewall measures, or failure to meet industry regulations such as the Payment Card Industry Data Security Standard (PCI DSS).
Companies can combat these failures by using scanning tools to conduct compliance discovery and reveal existing or potential vulnerabilities. Gaining visibility into issues allows organizations to better focus their attention and make improvements. Hiring an external partner to create a plan and execute these fixes can save time and money.
The Benefits of Effective Cybersecurity Risk Management
A well-rounded cybersecurity risk program can effectively tackle the concerns outlined above. Implementing a risk mitigation strategy helps to identify threats and put proper defenses in place to reduce the threat of cyberattacks.
By assessing, detecting, and mitigating enterprise risk, organizations can measure their cybersecurity posture, determine their risk profile, and assure they comply with regulatory requirements.
Companies must assess everything related to data protection, from password policies and encryption strength to endpoint security controls. The next step is to determine which are relatively weak. This risk assessment process allows businesses to fix vulnerabilities, improve their cybersecurity posture, and reduce the risk of financial and reputational harm.
How to Create a Successful Cybersecurity Risk Management Program
Assemble Your Cybersecurity Risk Intelligence Team
Cyber risk intelligence teams should begin with a leader who can leverage people and tools to propel the company’s cyber intelligence program from a reactive stance to an active one. This process requires dismantling silos and engaging both IT security professionals and stakeholders from across the entire organization to expose unknown threats, respond effectively, and increase the effectiveness of the overall cybersecurity program.
Assess Your Threats vs. Vulnerabilities
A cybersecurity threat is the threat of malicious attack by a bad actor attempting to gain access to a network, corrupt data, or steal confidential information assets.
Cybersecurity vulnerabilities, meanwhile, are the gaps in your network, systems, and hardware that allow attack attempts to succeed. These might include weak passwords, poor patch management, or lax security training. The more vulnerabilities an organization has, the more likely a cybersecurity threat will succeed. The threats could be malware, ransomware, phishing attacks, endpoint breaches, or other methods.
Hence a vulnerability assessment is so critical; it identifies security gaps so your organization can take steps to fix them. Doing so improves your company’s threat mitigation and prevention processes.
Create a Plan to Address Cyber Threats
This plan should begin by identifying all threats, and then resolve as much risk as possible by updating organizational policies or restructuring access.
Many threats, however, cannot be avoided. Therefore, companies must create a risk register to quantify the likelihood of each threat, its possible impact, mitigation actions to prevent the threat, and contingency plans to use in the event that the threat does occur.
After creating the register, security leaders should assign corresponding responsibilities. Finally, leaders must continue to monitor threats regularly and adjust the plan as necessary.
Develop Cybersecurity Training and Controls
Because employees are the largest risk to an organization’s IT security, staff should be trained to identify, report, and avoid potential threats. This training program should include an acceptable use policy.
Your organization should also develop identity and access controls, so that users can only access information and systems they are allowed to use. These controls should assign access rights based on the principle of least privilege, and account for separation of duties. This helps to assure that individuals have the access they need to do their jobs, but no more – and that no single user or department has duties that require unlimited access.
An enterprise risk management solution can help organizations create these protocols. It can also assure that the entire organization is aware of potential data breaches and appropriate responses.
What Are Cybersecurity Frameworks?
Cybersecurity frameworks offer guidance for how stakeholders (both internal and external) can manage cybersecurity risk. As cybersecurity risks and threats proliferate, a variety of regulatory entities have created frameworks. Prominent frameworks include:
- The National Institute of Standards and Technology (NIST) Cybersecurity Framework. NIST, a federal agency under the U.S. Department of Commerce, lists specific and customizable activities associated with managing cyber risk related to federal information systems.
- The Payment Card Industry Data Security Standard. Enforced by an independent organization created by major credit card companies, PCI DSS outlines IT and operational standards that organizations must implement to protect credit card data.
- International Organization for Standardization (ISO) Standard. This standard focuses on managing risk across organizations of all types and sizes.
Analyze & Eliminate Cybersecurity Risks with ZenRisk
Organizations need fast, easy, and prescriptive information security solutions to analyze and minimize cybersecurity risks in today’s threat-filled environment.
Reciprocity ZenRisk helps businesses streamline and improve their cyber risk management through an integrated and automated platform. It offers a single, real-time view of the information security risk across your business.
As part of the larger Reciprocity ROAR Platform, we provide compliance, audit, risk, third-party risk solutions, as well as governance and policy management applications, to help your organization gain greater cyber context and improve risk management execution.
What’s more, the platform’s pre-built registers and templates, flexible customization options, and award-winning support team simplify the process.
We’d love to help you reduce your risk exposure quickly and easily. Reach out to schedule a demo today.