Cybersecurity and Risk Management

What is cybersecurity risk management?

Cybersecurity risk management is the practice of identifying the risks to which your data and computer networks are exposed and devising ways to defend against them. 

Every business that connects to the internet and uses computers faces cybersecurity risks. Knowing which attacks present the most significant threat is the key to defending your company successfully. Cybersecurity risk management identifies those threats and helps you tailor a unique cybersecurity strategy for your business.

What are the benefits of cybersecurity risk management?

Cybersecurity risk management brings several benefits, including the following: 

• Cybersecurity risk management protects your company: By identifying and addressing vulnerabilities specific to your company, you protect it against cyberattacks and data breaches.
• Cybersecurity risk management saves money: Effective cybersecurity risk management helps protect your bottom line from a data breach. Data breach costs can be staggering and devastate affected small businesses. Even if you think you can afford a breach, your cash flow will be impacted significantly as you grapple with system and data recovery costs.
• Cybersecurity risk management ensures regulatory compliance: Depending on the nature and severity of a breach, you may be subject to significant regulatory fines. Customers may also bring a class action lawsuit against you. Preparing properly for cyberthreats can protect your organization from these outcomes.
• Cybersecurity risk management protects your reputation: A robust cybersecurity policy can strengthen your company’s reputation by demonstrating that you take your customers’ privacy seriously. Additionally, many enterprise companies and public sector organizations will want to see a thorough and active cybersecurity policy before they entertain doing business with you.
• Cybersecurity risk management supports business continuity: A cyberattack can stop a company from operating for days and often longer. Preventing a breach means you won’t lose revenue or incur costly fines. 

How to calculate your cybersecurity risk

Effective cybersecurity risk management starts with a cybersecurity risk assessment. In this analysis, you’ll pinpoint the threats most relevant to your business. Typically, companies use the following equation:

Risk = Attack’s Impact x Attack’s Likelihood

This equation is fairly open-ended because each side can include numerous variables. Some are easy to quantify and some aren’t. Consequently, determining risk isn’t always an exact science. Still, information technology (IT) departments and security specialists should be able to estimate at least how likely and damaging various attacks and attack vectors could be.

Cybersecurity risk management frameworks

Businesses can use several widely accepted frameworks to assess their cybersecurity risks. These frameworks are standards various organizations have established to measure threats, prioritize cyberdefenses, implement controls and score cybersecurity maturity.

Some companies develop proprietary frameworks. However, following a preestablished framework can help you establish trust with potential partners or customers. 

Consider the following well-known cybersecurity risk management frameworks.

1. NIST CSF

Perhaps the most popular risk management framework is the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF). The NIST CSF consists of three primary components:

2. ISO

The International Organization for Standardization (ISO) provides more than one framework for cybersecurity risk management, including the following: 

• ISO/ISE 27000: The ISO/ISE 27000 is the most relevant framework. It covers more than a dozen standards for finding and managing cybersecurity threats.
• ISO 31000: ISO also manages the ISO 31000 standard. ISO 31000 isn’t specifically a cybersecurity standard but an overall business risk management framework that includes cyber risk management.

Medium-sized and enterprise companies often apply both standards. They’ll use ISO/ISE 27000 to protect company data and ensure website security. They’ll use ISO 31000 to manage risks like changes in market demand, potential supply chain distribution issues and new regulations.

3. DoD RMF

The United States Department of Defense (DoD) Risk Management Framework (RMF) is a more industry-specific set of standards. As the name implies, this framework is what the DoD uses to evaluate and address its cybersecurity threats and defenses. It includes strict standards broken into these six steps:

1. Categorize
2. Select
3. Implement
4. Assess
5. Authorize
6. Monitor

The DoD requires risk management in most of its Cybersecurity Maturity Model Certification (CMMC) tiers. The CMMC applies to all the department’s more than 300,000 contractors.

Even though this framework is designed for DoD contractors, you don’t have to be in the defense industry to benefit from it. Its high standards and specific guidance make it ideal for any company.

4. FAIR

The Factor Analysis of Information Risk (FAIR) framework aims to spread awareness and action about information risk. Many industry leaders worldwide abide by these standards. In addition to providing guidance for businesses, FAIR partners with universities to spotlight cybersecurity education.

FAIR claims to offer more explicit and quantifiable guidelines for cybersecurity risk management than other frameworks. It seeks to improve risk management across four categories: people, processes, technology and policies.

Best practices for overseeing cybersecurity risk management

No matter what framework you adopt for your organization, there are a few things to consider in cybersecurity risk management. Even though the process will look different for every business, some steps, practices and considerations remain constant across all environments. These constants can serve as a roadmap for addressing the variables that arise in the process.

As your company begins the cybersecurity risk management process, keep these 10 best practices in mind.

1. Target internal threats in your risk management strategy.

It’s easy to focus on external threats like hackers, malware and cyber extortion. However, your business may also face internal threats. According to DTEX Systems, the average annual cost of an insider threat to a business is $16.2 million.

Insider threats can stem from naive or complacent employees as well as malicious insiders. Any effective risk management strategy must address these threats with thorough employee cybersecurity training, user activity monitoring and tighter access controls.

2. Prioritize the risks your company faces.

Ideally, your business would defend against all possible threats. However, this expectation is unrealistic. Limited cybersecurity budgets, time and staffing make it impossible to address every risk to the same degree. As a result, after determining what threats your company faces, you must prioritize them by urgency.

It’s best to allot the most time and resources to the risks most relevant to your organization. After establishing defenses against these risks, you can move on to lower-priority items.

3. Establish efficient communication channels.

Two of the most important ― but easily overlooked ― parts of cybersecurity risk management are information sharing and better workplace collaboration. Since threats can come from anywhere, all departments, teams and employees should understand them. It should be easy for your IT support to alert different workers to the risks they may face so they can avoid them.

This communication works both ways. You should establish channels that allow employees to report potential risks they notice. This will allow your staff to stop more breaches and mitigate the impact of those that do get through.

4. Enable continuous monitoring.

Another critical aspect of risk management is continuous monitoring. Your IT team can’t pinpoint risks and their causes if they don’t have thorough, accurate logs of what goes on in the network. Similarly, if this recordkeeping isn’t continuous, your team may not discover cyberattacks until it’s too late.

Most organizations don’t have the staff to monitor their networks manually but software solutions can automate the process. Some programs search for breaches, some for unusual user activity and others for dormant malware. Whatever your situation, you can likely find monitoring software that fits your needs.

5. Adhere to an established cybersecurity framework.

Even after analyzing the risks your business faces, addressing them isn’t always clear. Turning to established cybersecurity frameworks (as we outlined above) can provide some guidance in this area.

You don’t necessarily have to abide by every regulation within these guidelines but they can provide a helpful starting point.

6. Develop an incident response plan.

Every cybersecurity risk management strategy should include an incident response plan. This plan should be as detailed as possible, including multiple steps to fall back on should one response fail.

Containing cyberattacks is a time-sensitive issue. Your business can’t afford to wait until a threat emerges to determine how to handle it. Each risk needs a corresponding response plan. Codifying and recording these plans will ensure future teams can follow them after the workers who wrote them leave your company.

7. Ensure business continuity.

Risk management strategies should also include a continuity plan. It’s unrealistic to think that a data breach will never occur, so you’ll need a backup plan to stay functional in an emergency. A continuity plan will ensure critical systems remain accessible while security experts handle data loss.

What your business continuity plan looks like will vary. In general, however, these plans include containment strategies, backups of mission-critical data and services and reliable communication channels.

8. Consider cybersecurity liability insurance.

No cybersecurity strategy is foolproof. Consider liability insurance to help mitigate the costs associated with a data breach, including credit monitoring, alerting affected parties, regulatory fines and lawsuits. 

The cyber insurance industry has grown as cybercrime becomes more common. Many top business liability insurance providers, such as Chubb and AIG, offer cyber insurance coverage. On average, these plans cost about $145 per month. Consider your particular needs and budget to find the provider and plan that best fits your needs.

9. Cultivate a culture of cybersecurity.

It’s everyone’s responsibility in a modern workplace to be mindful of cybersecurity. Threats can come from anywhere, so every worker must do what they can to protect the business’s sensitive data. Cybersecurity risk management should be a central part of your company’s culture.

Cultivating a culture of cybersecurity starts with education. All workers should know where risks come from and what practices can prevent them. Managers should lead by example and recognize admirable behavior to encourage more attention to security.

10. Reevaluate cyber-risks regularly.

Cybersecurity is an ongoing process. Cybercriminals are constantly finding new ways around popular defenses, so security strategies must adapt to these new threats. Running cyber-risk audits should be a regular occurrence, with teams performing assessments every few years, if not annually.

Penetration testing, where security specialists attempt to break into a network to highlight its vulnerabilities, can also help ensure ongoing security. These insights can reveal threats and solutions that initial risk management assessments missed. While no system is perfect, embracing a culture of continuous improvement can ensure defenses stay as updated as possible.

Cybersecurity risk management is crucial for any business

Cybersecurity has become essential as digital technologies and data are increasingly central to operating your business. Following cybersecurity risk management steps will give your company the most effective cybersecurity plan. Without this process, you could face long-lasting damage from data breaches.

Mark Fairlie contributed to this article.