The term “information security risk” refers to the damage that attacks against IT systems can cause. IT risk encompasses a wide range of potential events, including data breaches, regulatory enforcement actions, financial costs, reputational damage, and more.
Although “risk” is often conflated with “threat,” the two are subtly different. “Risk” is a more conceptual term: something that may or may not happen. A threat is a specific, actual danger.
Worries about security risk can often slow progress and keep companies from meeting their goals. On the other hand, by taking the time to understand the risks you face and the best security measures you can implement, a company can create a strategy that balances cybersecurity risk with opportunity – one that allows you to grow while safeguarding your sensitive information.
What Are the Steps for an Information Security Risk Assessment?
A successful cybersecurity strategy (one that can feed into larger enterprise risk management efforts) starts with a risk assessment. While all risk assessments will differ depending on your individual needs, there are certain common elements that you can use as a framework.
Start by identifying every security risk your company is currently facing or could reasonably face in the near future. Including future risks in this step is crucial, as IT risk changes frequently when new technologies develop.
In this step, examine each risk and determine both its likelihood of occurring and the potential impact. Not every risk will require the same amount of attention, and risk analysis can help you prioritize the risks that have the largest potential for harm.
Once you understand what risks are faced by your company, you’ll need to develop controls and procedures to either minimize the damage or prevent it altogether. Your incident response strategy will also be developed during this step. The four most common types of risk response (discussed below) will help you create a risk management program that is tailored to your company and your goals.
Clear documentation of your policies and risk mitigation efforts will serve you well long term. Creating a risk register with your risks, assignments, and controls will keep everyone on the same page and minimize confusion and miscommunication. Documentation will also help you revisit your policies and revise them if change is needed in the future.
Monitor and Reassess
Your security risks will change as your business operations evolve, or as new technologies emerge, or as attackers find new ways to penetrate IT defenses. So monitor the success of your security efforts, reassess your risks periodically (usually once a year), and adjust your policies, procedures, and controls as necessary.
What Are the Four Types of Risk Response?
Deciding how to respond to your risks is an important element in your risk management process. There are four primary types of response, and you should assess your information systems as well as each risk individually to determine which approach will be the most effective.
This response understands that a certain amount of risk is always present. Also known as risk retention, risk acceptance is the decision that the potential gain for a given scenario outweighs the chance of loss.
Determining what risks are worth taking will depend on your company’s predetermined risk tolerance and appetite. It is up to your company to decide what constitutes an acceptable level of risk. In IT, a certain degree of risk acceptance will always be present when adopting new technologies that can provide growth for your organization.
Another common strategy is to share risk with an outside contractor or partner. An example of risk sharing in IT risk management would be using a cloud storage service like AWS or Microsoft Azure.
These companies have data protection baked into their agreements, and while such arrangements won’t entirely absolve you from responsibility, they will help you control and correct the damage should a security incident occur.
Risk transfer is when you move the responsibility for the risk onto an outside party. This is usually done by purchasing insurance for the issue in question. Security threats like malware or ransomware are frequently covered in IT insurance. Cybersecurity insurance is still a developing market, but could be a useful investment depending on your circumstances and goals.
Risk avoidance is generally the safest of these strategies. Avoidance, however, can keep your company from progressing the way you might want. To grow your business, a certain amount of risk will be required, and this is particularly true of IT risk. While it may seem wise to rely on trusted technology, risk avoidance in the IT realm can quickly render your company obsolete.
Information Security Risk Management Best Practices
IT risk management goes beyond listing your risks. To provide the best possible protection against cyber threats you’ll need to embed risk management into your company at every level.
Educate Your Staff
Your staff are your first and best defense against cyber breaches. Providing them with training and informing them of your policies can help you identify the warning signs of a breach and stop the damage before it starts. This kind of training can also help mitigate human error, prevent unauthorized access, and instill strong security hygiene throughout your organization.
Monitor Your Progress
Providing the strongest possible security for your will require consistent attention. The documentation that you created during your risk assessment will be instrumental in assuring that your security policy is up to date. A list of risks – more commonly known as a risk register – will also assist with changes in staff and make sure that all of your risks are correctly assigned and accounted for.
Successful risk management is flexible and will change over time as new threats emerge and old threats become redundant. It’s important that you revisit and revise the policies surrounding your information assets at least annually, or whenever your company undergoes significant change.
Adjusting your risk management program to changes will ensure that your security controls remain effective against new innovations in cybercrime.
Improve Information Security Risk Management with ZenGRC
IT risk management is challenging and can become more complicated as your company grows and expands. It is difficult to track risk throughout your entire organization, especially if you’re using analog methods for digital security.
ZenGRC is a software solution that provides a real-time view of your company’s entire risk management program. With integration and automation, ZenGRC provides you with a single source of truth that will streamline communication and make your risk and compliance efforts easier than ever before. Schedule a demo today and learn more about how ZenGRC can help you create a successful IT security program.