As organizations rely more on information technology and data systems to conduct business and manage operations, the inherent risks of using those technology assets increase. Several effective frameworks exist for managing those risks, to help enterprises and small businesses reduce exposure to threats, meet compliance obligations and compete in the marketplace.
A cyber risk assessment is an increasingly common, often mandatory operation for businesses of all sizes. An assessment can be applied to any application, function, or process within an organization. Conducting a cyber security risk assessment is often a detailed and complex process that requires expert planning, specialist knowledge, and stakeholder buy-in to deliver appropriate and actionable results. If you’re new to IT risk governance in general, here is what you need to know.
What Is a Cyber Risk Assessment?
Assessing and quantifying cyber risk is required for compliance with all commonly accepted US and international standards, including HIPAA, ISO 27000, GDPR, and NIST:
“Risk assessment is one of the fundamental components of an organizational risk management process as described in NIST Special Publication 800-39. Risk assessments are used to identify, estimate, and prioritize risk to organizational operations (i.e., mission, functions, image, and reputation), organizational assets, individuals, other organizations, and the Nation, resulting from the operation and use of information systems.” – NIST Special Publication 800-30
A cyber risk assessment is a tool used to inform decision-makers and support appropriate risk responses. It’s a comprehensive evaluation, testing and auditing process that asks and seeks to answer critical questions about your cyber security posture, including:
- What are our most important IT assets?
- What are the most relevant threats and vulnerabilities for our organization?
- How likely is it that vulnerabilities can be exploited, and what would the impact be?
- What is our organization’s attitude toward risk, and how can it be managed?
- What are the highest priority security risks we face?
The cyber assessment process helps you fully understand these questions, reveals answers and provides suggestions how best to proceed. Your organization will emerge with a better understanding of the value of the data you are trying to protect, the cost of that protection, and the potential consequences of failure.
One important note: cyber risk assessment should be an ongoing process. Continually monitoring and reviewing your risk environment is required to detect changes and maintain an effective overview of your evolving risk stance and security environment.
Why Enterprises Perform Cyber Risk Assessments
Cyber risk assessments are increasingly necessary, and often required, in the 21st century digital marketplace. They are an integral feature of any wider risk management strategy. Additional reasons enterprises regularly perform cyber risk assessments include:
- Avoid data breaches, IT incidents and adverse security events: The costs and reputational impact of an incident can be substantial.
- Reduce long-term costs: Mitigating threats and eliminating vulnerabilities can save money in the long-run, not just by preventing costly incidents but also by creating a foundation for continuous improvement, by better understanding and more effectively managing the data and security environment.
- Create a template for future assessments: Cyber risk assessments should be conducted regularly, completing one assessment supports continued evaluation of the evolving risk and security environment.
- Meet regulatory and compliance requirements: Organizations have increasing obligations to meet rigorous standards for data management and security performance, including from HIPAA, PCI DSS, GDPR and others.
- Establish a competitive advantage: Organizations with best-in-class cyber security posture enjoy increased productivity, improved public relations, enhanced capability to gain and retain employees, and have a leg up over other firms in their space.
Internal vs. External Assessment: Which Is Right for You?
If you have sufficient resources in-house, along with an experienced and capable security team available to manage those resources, then the full range of security operations is within reach. Enterprises of suitable scale, with the assets in place and the know-how to command them, can successfully conduct cyber risk assessment operations in-house.
With that said, large organizations with internal capabilities often want a fresh look at their cyber security program. In such cases they opt for an independent expert to provide support for conducting assessments and formulating new policies and standards.
On the other hand, if you are a startup or SME, you may face challenges to effectively manage cyber risk assessments in-house: limited budget, insufficient staff and time resources, and the need to have all deck for mission-critical operations are all barriers not just to success, but to even launching an operation. Conducting an assessment in-house can be insurmountable in these circumstances.
Engaging an external security provider allows these organizations to access cyber risk assessment leadership and best practices, without diverting limited resources away from core operations. You can have effective information security guidance and oversight, but not have to make sacrifices that might stand in the way of your goals. Other advantages include:
- Independent perspective on threats, vulnerabilities and improvement opportunities
- Access to enhanced capabilities, skill levels and knowledge of best practices
- Reduce overall costs
- Provide confidence for clients, vendors, shareholders and other stakeholders
What an Assessment Should Look Like
The foundation for an effective cyber risk assessment is framed as a comprehensive, iterative, and well-defined process aimed at identifying all risk types: operational, strategic, transactional, compliance and reputational risk. The basic steps include:
System categorization includes an assessment of each system to determine the type, internal and external interfaces, who uses the system, data flow, and more. This process reveals likely threats.
Threat identification begins in the previous process and is formalized in this step. Threat types include:
- Unauthorized access
- Information misuse
- Data exposure
- Data loss
- Service or productivity disruption
Risk determination and impact is assessed independent of the control environment. High, medium and low risk levels are assigned to create a prioritization schedule.
Control analysis identifies the available threat prevention, mitigation, detection and/or compensating controls, and assesses their effectiveness. Recommendations for added controls emerge from this analysis.
Threat scoring determines the likelihood of a given exploit, within the context of the control environment. Threats with a “low” rating have insufficient motivation or capability to exploit a vulnerability, or current controls are adequate to meet the threat. “High” rating threats have dangerous motivation and capability, and there is also a lack of adequate controls to prevent or impede the threat.
Calculation of final risk ratings creates a cyber risk assessment report with deep insights, actionable data, and recommendations for necessary adjustments. Risk assessment reporting is a fundamental element of an effective risk management process and allows enterprises to manifest an acceptable risk environment, while highlighting required control measures. The cyber risk assessment process is continuous, and should be reviewed regularly to ensure the relevance of findings.
Partner with SecurIT360 to Successfully Manage Your Risk Environment
Cyber risk assessments are integral to information risk management, compliance and enterprise performance. SecurIT360 is trusted by organizations just like yours to provide sensible risk analysis that catalogs relevant assets and their value, identifies threats and vulnerabilities, analyzes controls, and then prioritizes and fully documents risks in a report that includes recommendations for how to proceed. Assessment and reporting is customized to your organization’s needs, to ensure your team has complete support to make the best, most informed decisions.
SecurIT360 is a trusted advisor to small businesses and enterprises that are motivated to meet complex and evolving security challenges. We are available to help you compete and thrive in today’s digital environment – contact us to learn more.