According to the Government Accountability Office (GAO), malicious cyber attacks pose a significant risk to both the federal government and private businesses. This activity cannot only compromise critical infrastructure, but it costs Americans billions of dollars each year. Cyberattacks have been steadily rising for many years, but we’ve recently seen a huge spike in activity. According to a recent Accenture survey, 68% of business leaders said they feel their cybersecurity risks are increasing.
In the past, companies have turned to cyber insurance to manage risk. Data from a global insurance broker indicate its clients’ take-up rate for cyber insurance rose from 26% in 2016 to 47% in 2020. Unfortunately, this option is no longer as viable thanks to the increase in attacks. Insurers are so tapped out that they’re reducing coverage for some industry sectors, and some companies are ending coverage for ransomware attacks altogether in an effort to disincentivize cybercriminals.
The era of transferring cyber risk to insurance companies may be coming to an end. With companies not able to rely on a risk transference strategy as much, this could incentivize would-be victims of cyberattacks to implement better cybersecurity. Insurance is more of a bandaid for the problem anyway; it shouldn’t replace a robust IT security strategy.
If you’re coming to the same conclusion that many other companies are coming to right now, that it’s far past time you develop a sustainable cybersecurity strategy, then you need to put time and energy into your IT risk assessment process. Only by conducting a thorough risk assessment on a regular basis can you develop a solid foundation for ensuring business success.
The Fundamentals of IT Security
IT security is the practice of protecting digital data from risks. While cyberattacks represent a major risk, IT security must consider other potential threats, as well, such as the theft of sensitive data internally by an employee, damage to hardware or servers, or an outage occurring with a third-party service. Broadly speaking, an IT risk is any event that has the potential to cause an unplanned, negative business outcome involving the failure or misuse of IT.
To effectively protect your company’s data, you must understand, manage, control, and mitigate all risks to your assets. Your IT assets are any data whose loss or exposure would have a major impact on your operations. Before you begin the IT risk assessment process, you must first identify what your assets are and which business processes utilize or require this data.
The Building Blocks of an IT Risk Assessment
An IT risk assessment is the process of identifying and evaluating risks for assets that could be affected by cyberattacks or data-compromising events. The process consists of identifying internal and external threats, identifying vulnerabilities, evaluating potential impacts, determining likelihood, and finally, tailoring your IT security strategy to match your actual level of risk tolerance.
In an assessment, you’ll be evaluating your threats, vulnerability, impacts and likelihood.
Step 1: Threats
A threat is really just another name for a risk. To identify IT threats, brainstorming techniques are used to discuss all elements of your IT infrastructure and systems. Having experienced people involved in these brainstorming sessions is very beneficial, since they will be the most familiar with your company and any regulations you may be subject to. Checklists can also be a valuable tool at this time to ensure no components are overlooked.
Step 2: Vulnerabilities
A vulnerability is any potential weak point that could allow a threat to cause damage. If one of your threats you identified is a computer virus, a vulnerability could be outdated antivirus software.
Step 3: Impact
For the purposes of assessing the potential impact of a threat exploiting a vulnerability, you can create vulnerability-threat pairs. Vulnerability-threat pairs match specific threats to vulnerabilities and assess the level of impact of each pair on your assets. Each variable will be ranked on a predetermined risk scale such as low (1), medium (2) or high (3). You can decide for yourself how you want to structure this scale; perhaps higher risk ratings would reflect more financial risk, and a 3 would equate to more than $100K in damages while a 1 indicates negligible financial impacts.
The purpose of ranking vulnerability-threat pairs in this way is to help you prioritize the threats and vulnerabilities that require the most attention when creating your security strategy. For example, if your threat is hackers and your vulnerability is your firewall, this vulnerability-threat pair would receive a 3 if your firewall is weak. If you have strong perimeter defenses, this pair could receive a lower rating. In other words, if hackers targeted your network, it is very likely that the impact would be severe due to the vulnerability of your firewall.
Step 4: Likelihood
Finally, the last factor you need to evaluate in your IT risk assessment process is the likelihood of a threat occuring. Likelihood should be thought of in terms of ranges. On a scale of 1 to 10, for example, the likelihood of a natural disaster damaging your servers could be relatively low, perhaps a 1 or a 2, but the likelihood of someone tripping over a cord and disrupting on-site internet could be a 5 (or even higher if you’re clumsy).
Navigating the IT Risk Assessment Process
While you may assume that only the IT team should be involved in the IT risk assessment process, you’ll find much more success by taking a more comprehensive approach. Look for employees across all departments who know how data is used and will be able to help you identify your assets, threats, and vulnerabilities.
When it comes time to consider controls you’d like to implement to manage your IT security strategy, having employees of other departments involved from the onset will be especially beneficial. If you need to create new policies and procedures, purchase new equipment, make repairs to existing infrastructure, or educate employees on new systems, this will require input from others within the company.
As you involve more individuals in the process, you may find manually managing the IT risk assessment process becoming increasingly more difficult. This is where investing in a risk management platform will make all the difference. From risk identification to building your IT security strategy, ComplianceBridge Risk provides you with the tools you need to gain valuable insights about your risk.
Quickly build assessments utilizing a variety of question types including multiple choice, yes/no, fill-in-the-blank, or risk ratings. Weight questions for more accuracy and create conditional follow-up questions. By assigning different parts of your assessments to specific individuals, departments or groups, you’ll even be able to leverage your company’s subject matter experts and obtain data that has the highest level of dependability.
IT security has been on all of our minds lately. With less ability to outsource these risks to third-parties like insurance companies, now is the time for every company that wants to protect their data assets to take the steps to understand and control their risks. Performing a comprehensive IT risk assessment may sound like an overwhelming process, but with the right tools, you’ll find it’s not only easy, it’s incredibly beneficial. To learn how ComplianceBridge Risk will help make your life easier, schedule a demo today.