Cyber threats have grown from being plausible to probable. With organizations becoming more dependent on the internet, social media, and digitization, exposure to cyber risk has also increased manifold. Today, cyber security is among the top priorities of organizations world-wide simply because a cyber-attack can leave your organization in a dilapidated state – untethered from information systems and unable to provide services, owning a handful of compromised data, and staring at massive reputation loss.
To discover the big picture, consider some recent statistics. IBM reports that the global average cost of a data breach in 2020 was $3.86M. For the healthcare industry, the average cost is almost double, $7.13M. Concurrently, HIPAA Journal reported that 9.7M health records were compromised in September 2020 alone. But it’s not just big businesses that are facing the brunt of cyber breaches, 43% of cyber-attacks target small and medium businesses, notes Fundera.
With cybercrime growing at a compounding rate – 300-600% in recent months – cyber risk positions itself as the biggest challenge to organizations around the globe. Here’s a primer on cyber risk and your organization.
Cyber risk refers to the risk associated with “financial loss, disruption or damage to the reputation of an organization from failure, unauthorized or erroneous use of its information systems,” as per PWC. However, it includes the “the potential of loss or harm related to technical infrastructure or the use of technology within an organization,” according to RSA.
Cyber risk can materialize in varied forms. Here are some examples of cyber risk:
Cyber risks can be classified according to intent and source:
It is worth noting that the classification of cyber risks according to intent and source may not determine the negative impact they have on your organization. For instance, reports have it that 52% of data security breaches boil down to human error and system failure. Another report indicates that 95% of cybersecurity breaches have their source in human error.
The impact of cyber risk can be divided into a few categories:
The cost of protection is also something that can be added to this list. Building safer information and networking systems takes money and requires the use of vetted software and hardware. The ongoing management of these systems and their maintenance also add to the costs.
In today’s digital age, you cannot avoid exposing yourself to some amount of cyber risk. You cannot avoid digitalization or digital transformation just because you want to avoid cyber risks. It can affect your business growth, revenue expansion, and market consolidation.
Hence, the goal is to navigate cyber risk well.
Firstly, you need to know what your assets are. And what you are trying to protect from intentional/ unintentional cyber risks:
Then, you need to understand what cyber threats you may face, and which assets may come under fire. Cyber threats are not the same as cyber risks. A threat is an event that can exploit a point of vulnerability to damage an asset. When you have linked cyber threats to your assets, you know what cyber risks you have on hand.
With this information ready, you can then proceed to drafting a cyber risk appetite statement. Defining your cyber risk appetite gives you clarity on many fronts:
Cyber risk management is an ongoing process that can be broken down into a few key steps:
1. Identify the risks: Note your assets, threats, and vulnerabilities. For instance, you may have a weak technological infrastructure with employees working from home on personal devices, and this could lead to company data being more vulnerable. Here are some possible avenues of cyber risk:
2. Assess the risks: At this stage, you need to analyze the risks in terms of their likelihood and severity. Based on that you can forecast what the impact of the risk may be.
3. Evaluate and prioritize the risks: This becomes easy if you have a well-defined risk appetite statement. You can begin to answer questions such as:
4. Respond to the risks: You can modify the impact of a risk by adopting a corrective control. For instance, you can enforce multi-factor authentication for more secure logins, deploy company apps to isolate sensitive data, and adopt a policy for patch/ update management. Exploring the 20 CIS controls can prove to be vital.
Here are some practical ways to reduce cyber risks:
After treating your risks with controls, you decide to tolerate some cyber risks, terminate others, and transfer the rest to a third party.
Your cyber risk management efforts work best when they tie in with your organization’s risk management framework. Moreover, you should strive for a three-pronged approach of ‘cyber risk assessment’, ‘cyber risk management’ and ‘cyber risk monitoring’. Whether it is enforcement, accountability or the aspect of bringing senior leadership into the game, you can best integrate cyber risk management with your GRC strategy when you have a risk management platform like VComply.
With VComply, you can set in motion cyber risk management lifecycle, invite collaborators to evaluate risks, establish tolerance levels, monitor your risks, assign implement controls to address risks, delegate ownership, and escalate failures, setup alerts and more. This gives you the means to safeguard your organization against internal and external cyber threats in real-time.
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