Cyber Security Risk Management: A Complete Guide

It was important before the pandemic and the rise of remote working.

It’s now vital.

Cyber attacks have increased hugely since early 2020.

Cyber security risk management is now a challenge faced by all businesses and organisations, large and small. And with cyber threats constantly evolving, cyber security risk assessments need to be a critical part of your company’s procedures.

In this article, we’ll guide you through what is cybersecurity risk management, what is cyber risk, what is a cyber risk assessment, why it’s essential and how to carry it out.

What is cybersecurity risk management?

Cybersecurity risk management enables your organisation to recognise and control perceived cyber risks.

The process usually consists of…

- Identify the threat

- Analyse the threat

- Evaluate the threat

- Prioritise the threat

- Respond to the threat

Of course, cyber threats evolve, as do your systems and activities. So, your risk management processes and controls need to evolve too.

What is cyber risk?

Cyber risk is the risk of suffering disruption or loss of sensitive data, finances or online business operations, often resulting in a data breach.

A formula crops up frequently to help quantify the risk.

If you quantify a particular threat, vulnerability and potential loss, each on a scale of 1 to 10, a high-level formula would be:

Risk = Threat x Vulnerability x Loss

Using this formula can help you assess the risk associated with a particular cyber threat under particular conditions.

Some of the most common cyber risks or security threats include:

- Ransomware

An example of malicious software or malware, which denies access to a computer system or data until a ransom is paid.

- Phishing

Is a cyber attack that collects sensitive information under the guise of a legitimate website or email.

- Data leaks

When sensitive data is accidentally exposed, either on the internet or lost hard drives or devices.

- Malware

Malware is a collective term for any program or file that is harmful to a user, e.g., viruses, worms, spyware, ransomware, etc.

- Insider threats

Threats that come from negligent or malicious insiders, such as employees, former employees, contractors, etc.

What is a cyber risk assessment?

A cyber security risk assessment is the process of identifying, analysing and evaluating risk.

Or, in simpler terms:

- What can go wrong?

- How likely is it?

- How serious are the consequences?

A cyber security risk assessment is used to assess the likelihood of a cyber attack and the impact it could have on your company’s reputation, finances and business health.

Why cyber risk assessment is essential.

As technology is continually evolving and with hybrid working (flexible working between office and home) becoming the norm, regular cyber risk assessments are vital.

Cyber risks need to be minimized. With regular cyber risk assessments, your organisation can spot the biggest threats, then take necessary action to reduce the associated risk.

There are plenty of reasons to carry out a cyber risk assessment. For example:

- Reduce long-term costs.

Mitigating potential threats and vulnerabilities to reduce security incidents can save your company financial and reputational costs in the long term.

- Avoid data breaches.

These can have huge impacts on your reputation and finances. Impacts that are hard to recover from.

- Avoid regulatory issues.

Have proper securities in place to prevent intrusions and keep sensitive data private. These will help ensure you stay up to date with SOC2 and GDPR requirements, for example.

- Avoid application and system downtime.

If your systems or applications are down or your data isn’t available, your staff and customers can’t do their jobs.

- Identify vulnerabilities.

- Determine the potential impact of cyber security issues.

- Assess the likelihood of issues occurring.

How to perform a cyber risk assessment.

Before assessing risks and protecting against potential threats, you need to know what data you have, what infrastructure you have in place and the value of that data.

Identifying your information systems and the risk to them allows you to prioritise protecting your most valuable assets by incorporating security controls on infrastructure and systems that contain sensitive data.

Your risk assessment should include categorizing risks to IT systems and sensitive data, and the potential impact of a data breach.

Your cyber security risk assessment process might include the following:

- Audit existing data

- Determine the value associated with this data

- Identify and prioritise assets

- Identify potential cyber threats

- Identify vulnerabilities

- Analyse existing security controls

- Evaluate the likelihood and impact of various cyber threats

- Prioritise risks

- Determine new security controls that will mitigate the risks

- Implement changes and reassess

Cyber security risk management.

As mentioned earlier, effective cyber security risk management involves a few actions to be in place:

- Evaluating existing assets (the risk assessment).

- Identifying risks – past, present and future.

- Planning for attacks and assuming attacks will happen sooner or later.

- Continuously reviewing and revising security controls.

- Building and developing a culture of organizational cyber security.

When risks are identified, decisions need to be made regarding how to respond.

These might include:

- Treat them – take steps to mitigate risks.

- Tolerate them – if they fall within pre-agreed and defined criteria.

- Terminate – avoid the risk entirely.

- Transfer – share the risk, possibly with an external supporting third party.

There’s an excellent risk management guidance resource that offers detailed guidance to help organisations make decisions about their cyber security risk. You can find it on the National Cyber Security Centre website.