Businesses face an endless stream of security concerns. Internal controls and security procedures help, but not every risk can be managed out of existence.
To build a sustainable security program, executives need to rely on risk acceptance and security exceptions to keep operations running, and to placate stakeholders as much as possible.
Although those two terms might seem similar in the world of risk management, they actually are independent processes with different objectives and implications. We will explore those differences in this article.
What Is a Security Exception?
A security exception happens when you decide not to apply a certain internal cybersecurity policy based on functional or strategic factors. That is, some set of circumstances arises where the organization decides to grant an exception to normal security policies.
For example, your business might have processes in place for software or operating system updates. Under certain circumstances, an update might create operational issues with drivers, software, or other hardware. Security exceptions allow the cybersecurity team to suspend its update policies if the update would substantially disrupt workflow.
Exception requests must be strictly monitored to assure their proper use, and security exceptions should be rare. Too many exceptions can lead to the failure of a compliance program. You should have a process in place to review exception requests and determine whether the need to deviate from a security policy truly is necessary.
What Is Risk Acceptance?
Risk acceptance is one of several elements of risk management. It involves executives assessing the cost and benefits of the policies or practices within the organization that are above the company’s tolerable risk levels. Leadership then has to decide whether those practices are worth the greater risk associated with them – that is, to accept the risk – or to reduce the risk to more acceptable levels.
Risk acceptance allows businesses to take advantage of profitable opportunities that wouldn’t be available under a strict compliance management environment with minimal risk exceptions.
The decision to assume a specific risk requires a comprehensive risk assessment process, along with a risk mitigation strategy designed to provide the best protection for the business and stakeholders. It is important to note that risk acceptance is a deliberate decision from business leaders to accept a certain level of risk after considering all available information and options.
Risk assessments should go beyond considering the direct benefit of the policy against possible threats; they should also consider the resources and budget that needs to be allocated to reduce a newly identified risk and to establish healthier security practices.
For example, risk acceptance within the cybersecurity environment can be linked to tools that automate processes. While leadership may understand there is a level of risk involved with using a third-party vendor for automation, the benefits of that vendor relationship can cut costs for the organization.
Evaluating Risk Acceptance
Risk is an important issue in information security, and it causes many business leaders (often the CISO or CIO) to make decisions about whether to avoid, accept, mitigate, or transfer risks. While businesses may not be able to eliminate all potential threats, implementing practical risk acceptance can help leaders understand how to navigate today’s threat landscape.
Risk acceptance is an important part of a risk management framework because it helps companies prioritize what types of risks are most serious and should receive more attention than others.
What Is Risk Acceptance in Information Security?
Risk acceptance in information security is a strategy where an organization decides to accept the potential risks and associated outcomes of a particular security threat rather than avoiding or mitigating it. The decision is usually made after a thorough risk assessment has identified the likelihood and impact of the threat.
Risk acceptance is ultimately a conscious decision to acknowledge the risks the organization faces, while also accepting the consequences should the risks strike and disrupt business operations.
What Are the Different Types of Risk Acceptance?
Risk acceptance is not just a one-way approach to risk. Businesses can take either of two approaches to risk acceptance and cybersecurity risk.
Inherent risk acceptance. This is the more passive approach. Often, no immediate action is taken to mitigate or avoid the risk. It involves accepting a security risk without mitigating the issue, given that the risks are seemingly unavoidable.
For instance, an organization may choose to accept the risk of a data breach if implementing more security measures is too costly to maintain a more robust security posture.
Residual risk acceptance. In this type of risk acceptance, the risk is accepted after all security controls and mitigation methods have been implemented to manage it. With residual risk acceptance, businesses understand that some risks cannot be avoided entirely, but they can be monitored.
For example, organizations can accept that a certain level of risk will occur with known system or application vulnerabilities even after the business has implemented as many mitigation measures as are economically feasible.
What Is the Difference Between Risk Acceptance and Risk Mitigation?
Businesses face many different kinds of risk scenarios. Often, risk acceptance and risk mitigation can mistakenly be misrepresented as similar, yet both are two different approaches to risk.
Organizations choose risk acceptance when the cost of mitigating the risk is too expensive or the risk’s likelihood and impact are deemed acceptable within certain thresholds. For example, a company may accept the risk of data breaches because the cost of investing in the most expensive and comprehensive security system may exceed the cost of any damage from a breach.
Risk mitigation means taking action to reduce or eliminate the likelihood or minimize the impact of a risk. This can include implementing preventative measures such as using firewalls to prevent cyber-attacks or developing contingency plans to deal with potential consequences of the risk. It can also include conducting regular testing and investing in a compliance management software for your business to help understand your threat landscape from risk.
What Kinds of Risks are Acceptable in Information Security?
Several risks can be acceptable under most risk management frameworks. Below are a few of the use cases where risk acceptance might be necessary.
Legacy or outdated software. Organizations might use legacy systems or outdated software programs that are no longer supported by the vendor or the manufacturer. Even though these systems or software applications may have known vulnerabilities, the risk of decommissioning them could cause greater disruptions to the digital or physical supply chain and business operations. This kind of risk acceptance within information security is often due to the high cost of replacing or upgrading the systems and software essential for business.
Third-party vendor management. Businesses often need third-party vendors to provide critical services such as cloud hosting, project management automation, or payment processing. These vendors often have their own security controls and protocols in place, so an organization may choose to accept the risk of security incidents or data breaches that could affect their data.
Bring your own device (BYOD) and mobile devices. Many companies allow employees to access company resources from their personal electronic devices, even though this might increase the risk of cyber attacks. This risk may be accepted because it allows for more flexibility and convenience in how employees work, while reducing costs to the business.
Authentication and password procedures. Organizations can implement password and authentication controls to minimize threats, but if these processes are too costly to create stricter guidelines for employees, that might drive employees to use “shadow IT” access to company systems, networks, and devices.
Strict authentication policies can also open the door to employee frustration and limit productivity if they are unable to access the resources they need to complete their work effectively.
How Do Risk Acceptance and Security Exceptions Differ?
Risk acceptance and security exceptions are not the same. They mainly differ in their evaluation focus.
A security exception evaluates an action (or the lack thereof) from a business compliance perspective: “How great is our compliance risk if we don’t follow existing policy in this instance?” Risk acceptance evaluates business activities from a larger risk management perspective: “Are the benefits of this action large enough that we should undertake it?”
Not every non-compliance issue turns into business risk, and not every business risk leads to a compliance failure. In the same way, a security exception could generate a risk that is consequently accepted.
When security exceptions have a high impact, there will usually be a high risk that the stakeholders will have to accept or remediate.
Especially in cloud-based process automation and real-time database sync cases, information security offices will need to perform various risk analyses depending on the enterprise’s risk appetite. They will also need to apply some combination of security exceptions and risk acceptance to protect their stakeholders from information security risks and the potential security incidents that may follow.
Keep Your Data Safe with the ROAR Platform
Risk acceptance within information security can be challenging, particularly if your employees are using legacy systems or manual tools such as spreadsheets – but it does not have to be that way. Implement the RiskOptics ROAR Platform, and your security team can protect your company from the risks of today’s highly interconnected world with tools that make tracking incidents and assessing the level of risk easy.
With ROAR’s central dashboard, automation capabilities, and easy-to-use templates, much of your security control and risk management concerns are done for you. This allows team members to work on other business needs and senior management to focus on strategy.