What Is A Cybersecurity Risk Assessment?
A cybersecurity risk assessment is a process that helps you to identify, analyze, and evaluate the risks of your information technology systems getting affected by a cyber attack.
Nowadays, all organizations rely heavily on information technology and information systems for conducting their business. Like any other aspect of the business, information technology, and information systems have inherent risks, which you have to contend with. Cyber risk assessments, therefore, play a crucial role in your organization’s risk management strategy.
Without a proper cyber risk assessment, it wouldn’t be possible to know the threats you need to deal with and the security measures that best fit your business's needs. You will be simply using trial and error, wasting precious resources in the process and more importantly, you will be leaving gaps in your security, making it susceptible to cyber attacks.
Cybersecurity risk assessments help you identify your most critical data and devices, how threat actors such as a hacker could gain access, what risks you would face if your data is stolen, and how vulnerable you are as a target to hackers.
Why Should You Perform A Cybersecurity Risk Assessment?
The purpose of a cyber risk assessment is to help you stay in control of your cybersecurity systems by allowing you to make informed decisions about the cyber risks and ensuring that your cyber defenses and controls established are appropriate for the cyber threats that your business faces.
Every business needs to perform regular cybersecurity risk assessments because managing risk is critical, and that process begins with a risk assessment. Let’s look at some important reasons for performing a risk assessment:
Reduce the costs resulting from security incidents and associated downtime.
Get a better understanding of your vulnerabilities and where to allocate your resources.
Secure data to avoid breaches and associated financial implications.
Acquire and maintain compliance with regulatory requirements such as HIPAA, HITECH, etc.
Prevent the theft of data, intellectual property, trade secrets, etc.
How To Perform A Cybersecurity Risk Assessment?
A risk assessment can be performed on any of your organization’s systems, applications, or processes. So the first step is to develop a framework for identifying the systems critical to your business operations.
You can choose from a number of standard information security frameworks that are available. Your choice of a particular framework will largely be determined by your industry type and compliance requirements. When selecting a framework, you also need to keep in mind your customer expectations as well as the security capabilities of your IT team.
Here are some examples of security frameworks:
Security frameworks are often customized to address particular security issues of an industry or organization. Therefore, selecting one doesn’t necessarily have to be a complicated or time-consuming process. Once you have selected a framework, you are ready to begin your risk assessment. Here are the basic steps for performing a risk assessment:
6 Step Guide To A Cybersecurity Risk Assessment
1. Identify Assets
The first step of your risk assessment is to identify the assets. This is necessary because you will likely have a limited budget for risk management and hence your scope will have to be limited to the most critical assets. Your assets could be tangible or intangible, such as:
People
Process
Technology
Data
Once your assets are identified, you will need to define some standards for determining the value or importance of each asset. You can utilize the asset value as well as the legal and business importance of each asset to put them into categories and choose the most critical asset class.
Using this information, you need to define the system functions & boundary and the critical system & data. Think of the following during the definition:
What internal and external interfaces are present?
What kind of data is used and how does it flow?
Who are the users and who are the vendors?
Now that you have scoped out your systems and processes and determined their value, you will be able to more accurately determine the threats and vulnerabilities.
2. Identify Threats & Vulnerabilities
There are a plethora of cyber threats your business will be facing but you can’t possibly address all of them simultaneously. You need to focus on the highest priority security risks and reduce those risks in the most cost-effective way. Focusing on unrealistic threats that aren’t an imminent and serious threat to your business will result in gaps, wasted resources and time, as well as overload your security team.
The threats that come immediately to mind are hackers, ransomware, malware, etc. However, there exist other threats that are more common and pose a higher threat. Here are some of the common threats:
Insider threats:
Unauthorized access
Misuse of data by authorized users
Errors such as alteration or deletion of data
Loss of device or data
Natural disaster leading to loss of business operations or location
Service disruption due to system failure
Adversarial threats such as corporate espionage
A vulnerability is a weakness in your system that a threat can exploit to cause a breach. Identifying vulnerabilities will allow you to move from asking what can happen to what is likely to happen. You can find vulnerabilities through security audit reports.
3. Access The Current State
In order to improve your security, you first need to know your current state of affairs, i.e. your strengths and weaknesses. In the above section, you identified your weaknesses, now it’s time to access your strengths. For this, you need to analyze all the relevant control measures that you have implemented. Some examples include two-factor authentication, encryption, mobile device management, intrusion detection, etc.
The access controls don’t necessarily have to be technical. Many cases will require physical and administrative controls such as automatic door locks, video surveillance, access badges, sign-in log, etc.
4. Evaluate Risks
After identifying the threats and vulnerabilities and accessing your current security controls, you will be in a position to calculate the risk. In an earlier blog post, we have discussed how to calculate risk.
Risk is calculated as:
Risk = Likelihood x Impact
Let’s take an example to better understand this concept:
Imagine that your average daily revenue from operations is $10,000. In the case of service disruption due to loss of system or application, you estimate that you will lose 2 days of operations before you can restore the operations to working level. So the impact of this threat is $20,000 ($10,000 per day x 2 days). The likelihood of this happening is low, say once in a year.
So in this case, the risk = $20,000 x 1 = $20,000 a year. This will justify a budget of $20,000/12 = $1,666.66 per month for mitigating this threat.
It is important to note that the risk doesn’t necessarily have to be financial. It can also inflict intangible damage such as loss of reputation and trust. You just need to attach a monetary value to each threat. This will enable you to prioritize the risks based on their value.
5. Assign Ownership
Now you have a list of risks that need to be mitigated. Each threat mitigation may require just a few steps or complex projects, in any case, you will need to assign ownership for each threat mitigation. The ownership must be assigned to an individual and not to an entire team or department. Assigning individual ownership ensures that each of the security initiatives is followed-through and seen to completion and that they don’t fall through the cracks.
6. Document The Results
The final step in your cybersecurity risk assessment is to create a report of your findings. This document will help you not only in budgeting and planning but will also be invaluable in keeping your policies and procedures up-to-date. Each threat, vulnerability, value, mitigation steps, and ownership must be recorded for keeping track of the progress and for future reference. Your document will also serve as a template for future assessments.
In your first assessment, it is likely that you may not have answers to every question arising in the above sections and will have to work with estimations and guesswork. But as you keep performing assessments regularly, the answers will come easier, especially those concerning the financial impact and likelihood. With every assessment, your security will improve as you address the gaps and keep your policies and procedures current.
Next Steps: IT Risk Management And ISO/IEC 27005
Regular security risk assessments are a crucial part of any risk management process. Cybersecurity risk assessments help you reach an acceptable level of information security risk without blowing up your budget. An ideal assessment helps improve your IT security cost-effectively and without negatively impacting the productivity and effectiveness of your business operations.
The next step in the process will take you towards certifications such as ISO/IEC 27005 or NIST SP 800-39. Having such a certification under your belt demonstrates that you are committed to protecting client and employee information as well as to the effective management of risks to information security. This, in turn, will contribute to building your brand and security reputation.
Are you looking to improve your security posture, build your security reputation, or to become certified or compliant? It is very likely that you will need the assistance of a trusted IT partner in your security endeavors. Joining forces with an IT partner at the get-go will help you in achieving and maintaining compliance or certifications on schedule and within budget. Get in touch with us today to learn how we can help you with your cybersecurity needs.
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About The Author
Hari SubediMarketing Manager at Jones IT
Hari is an online marketing professional with a focus on content marketing. He writes on topics related to IT, Security, Small Business, and Mindfulness. He is also the founder and managing director of Girivar Kft., a business services company located in Budapest, Hungary.