What Is Cyber Risk Management and Why It Matters
Did you know that by 2026, the global cyber security market is expected to increase to USD 398.3 billion?
Business processes are becoming significantly quicker, more mobile, and more effective as technology advances. Cloud migration, third-party resellers, and mobile devices all boost convenience. However, they increase cyber risk exposure. Cloud services for software and platforms (PaaS), 3rd party partners and vendors, mobile devices, and remote work have significantly elevated cyber risk.
But, what exactly is cyber risk, and how can we protect ourselves and our companies while keeping the business going (hopefully growing) and managing innovation in this online world?
Let's explore cyber risk and how we can effectively manage risk while drawing down on the benefits of advancing technology.
Cyber Risk Management
Managing security in cyberspace is complex, and no one can dispute this. There are tried and tested methods to reduce risk. But one thing is for sure we cannot ignore it!
By accepting the Miriam Webster's definition of risk as:
“possibility of loss or injury
someone or something that creates or suggests a hazard
the chance of loss or the perils to the subject matter of an insurance contract
the degree of probability of such loss
a person or thing that is a specified hazard to an insurer
an insurance hazard from a specified cause or source
the chance that an investment (such as a stock or commodity) will lose value
To be 'at risk.'
in a state or condition marked by a high level of risk or susceptibility”
We can now start to think about what we can do to reduce our 'at risk' status.
Let's spend a couple of minutes discussing risk mitigation, which is essentially the development of preventive and reactive action plans to reduce the impact of the identified risk. By having a structured program of action, some identified risks can be avoided entirely. The key in the previous statement is the 'identification' of risk.
At a macro level, risk management concerns the following:
Identify - your business does not have internal risk only. Look upstream and downstream to identify risks that most likely will be out of your control
Assess - right here - You need to spend time evaluating how likely the risk is to manifest
Monitor - there is an expression "you cannot manage it if you cannot monitor it"
Mitigate - this is your cyber incident plan. What will you do if the event manifests?
Once risks have been identified, there are five steps to build the risk mitigation strategy and develop the cyber incident response plan.
Prioritise - these are the risks that you feel will need to be addressed first in the event of a cyber event
Accept - there are some risks that one cannot do anything about. Be very circumspect when accepting risks
Avoid - there are some risks that we can avoid. An example is keeping extra stock s a buffer to prevent outages
Reduce - rescue risk by implementing risk monitoring. This could be a monthly get together between critical stakeholders to review the risk landscape and make necessary changes to mitigation
Transfer - in one word - insurance! Consider taking out insurance to cover your business
Managing Risk in Cyberspace
Acknowledging the expansive landscape of digital risk spans can make it very difficult to identify risk points, let alone develop plans to reduce the risk. In addition, how each industry and organisation employs online technologies and their own threats makes it more difficult to define in broad terms.
Cyber risk management is an ongoing effort.
The establishment of control mechanisms to manage risk is made even more difficult by the expansive use-cases. In addition, each one of us use technology differently. As such, the means we need to put in place vary greatly.
It’s Unsettling and Challenging
Cyberattacks are one of today's most visible and concerning risks. Hackers work around the clock, aided by automated bot armies, looking for any weakness. A slight flaw in an organisation's defence is all that is required for a network invasion to occur.
It's almost impossible for organisations to close every hole and secure every device, but threat actors only need one weakness to succeed.
Most cyber-attacks are meant to access business data, introducing a critical cyber risk today—data breaches. How would you feel if an intruder with bad intents could access your company's vital information, including your customers' personal information?
Isn't it a little unsettling? Managing cyber risk is an uphill battle for organisations, and threat actors are winning. However, 35% of organisations still handle risk ad hoc, which can be seen in the numbers.
Cyber risk management is now a team sport that needs help and input from all departments.
Enterprises risk breaking data privacy and cybersecurity requirements by exposing sensitive customer data.
Cyber risk management must be viewed as a strategic business activity that receives enough resources. Therefore, organisations must work from a robust governance and accountability base to build and maintain a united, coordinated, and disciplined management solution. For success, effective governance is essential, beginning with the precise identification and delineation of all roles and duties.
Leadership must ensure that risk management is coordinated with other initiatives such as compliance. For example, risks and compliance requirements should be linked to security controls, so that security teams can identify vulnerabilities in their environment and devise a strategy to improve their security and compliance stance.
Managing cyber risk is a dynamic and ongoing activity requiring an adaptable and tenacious "bend but don't break" approach. Because technology environments and security concerns change frequently, risk mitigation mechanisms must be reviewed and monitored regularly.
Externally, through viruses or third-party vendors with a weak security posture, or inside, from rogue employee sabotage or the failure of sloppy security policies such as not patching software regularly.
It is good to engage an expert to help you identify risks that could impact your business and build appropriate plans. Why not get in touch with us before it's too late? We have a wealth of experience in cybersecurity prevention processes.