What is Cyber Risk Management?

Cyber threats are constantly changing. Adopting a risk-based strategy to cyber security, where you continually examine your risks and if your present procedures are suitable, is the most effective way to safeguard your organization against cyber threats.

A risk-based strategy ensures that the cyber security measures you install are tailored to your company's specific risk profile, so you won't waste time, effort, or money dealing with unlikely or irrelevant threats.

The process of discovering, analyzing, evaluating, and responding to cyber security hazards in your organization is known as cyber risk management. A cyber risk assessment is an initial step in any cyber risk management strategy.

Many information security standards and frameworks and legislation like the GDPR (General Data Protection Regulation) and NIS Regulations require risk management (Network and Information Systems Regulations 2018). IT Governance can help you create a cyber-threat management strategy that will allow you to address your security challenges in a systematic manner.

Procedure for Managing Cyber Risks

Before getting into the steps and precautions that you should take to manage and mitigate cyber risks, let's understand why it is so much more difficult to manage cyber risk today than it has ever been.

  • On an average, 583 third-parties have access to secret information at a corporation. IT security professionals have a lot on their plates, juggling complicated infrastructures rife with vendor risk.

  • Meanwhile, businesses must comply with an increasing number of laws and regulations governing the protection of confidential information. Today's businesses are held liable for the data processed on their behalf by third parties. As if managing your own risk wasn't difficult enough, today's businesses now have to deal with vendor risk.

  • Enterprises are being asked to take on more responsibilities with fewer resources while dealing with increasing rules that come with harsh penalties for non-compliance.

Now let's see what steps you can take to manage the ever-increasing cyber risks:

  • Determine the threats that could jeopardize your cyber security. This usually entails identifying your system's cyber security weaknesses as well as the dangers that could exploit them.

  • Assess the severity of each risk by determining how probable it is to occur and the potential consequence if it does.

  • Consider how each risk fits your risk tolerance (your predetermined acceptable risk level).

  • Prioritize the dangers.

  • Choose a strategy for dealing with each danger.

  • Monitor your risks to ensure they are still acceptable, review your controls to ensure they are still fit for purpose, and make modifications as needed because cyber risk management is a continuous activity.

Cyber Risk Can't Be Eliminated

The truth is that risk cannot be completely removed. Acceptance and transference are the only responses to risk. Mitigation comes into play in this situation.

Mitigation is the act of putting items in place to lessen the risk by offsetting the likelihood (probability of occurrence) or impact (amount of harm done). The goal is to lower the risk score to a point where you are either comfortable with the risk (acceptance), or someone else is willing to assume responsibility for it (acceptance) (transference).

Identify Potential Cyber Risk Mitigation Strategies

Understanding all of your risk mitigation options − your team can use either technical or best practice methods, or ideally a combination of both − is the crucial third step of the reaction. Encryption, firewalls, threat hunting software, and engaging automation for better system efficiency are examples of technological risk mitigation strategies. The following are some of the best risk-mitigation strategies −

  • Programs for cybersecurity education
  • Programs for cybersecurity education
  • Solutions for privileged access management (PAM)
  • Authentication with many factors
  • Backup of dynamic data

The process of risk management is never-ending. There is no such thing as "zero risk." It's even depressing to consider all of the things that could go wrong. However, you may improve and secure your organization by going through the process.

That brings us to the issue of cybersecurity risk that remains. This is the risk that remains after all mitigation measures have been implemented—the type of inevitable risk that you can't do much about. You may either learn to live with residual risk or transfer it to an insurance provider who will shoulder it for a charge. Cybersecurity insurance is a last-ditch alternative for reducing residual risk, and it is expected to grow in popularity as the cost of cyber events becomes more predictable.

Organizations are increasingly required to appropriately estimate these in respect to cybersecurity risk. When calculating the cost of cybersecurity risk, there are three sorts of expenses to consider. Operational expenses are simple to calculate and include lost time or resources. Fines for non-compliance or lost revenue when existing clients leave or fresh chances are lost are examples of financial expenses.

Updated on: 02-Jun-2022


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