Cyber Risk is a Menace: It Causes Havoc to Operations or Reputation

5 min read
(February 23, 2023)

Cyber risk is a menace that can cause havoc to any company's operations or reputation due to a cyber-attack. The size of the company or the industry it belongs to does not matter when it comes to being vulnerable to attackers. Most of these attackers aim to make money out of stolen confidential information. This process of detecting possibilities of a cyber-attack is called cyber risk management.

Managing Cyber Risks

In this era of ever-evolving technology, managing cyber risks is essential for businesses of all sizes. It is not only the less prominent companies that are at risk of becoming a target for attackers; even the most acclaimed companies with a substantial customer base can be vulnerable to attacks. If a company is unprepared for such an incident, it can result in a data catastrophe, financial harm, damage to the brand's reputation, and decreased employee morale. Implementing anti-virus is not enough to prevent cyber-attacks; it only covers one aspect of risk management.

Companies must create and execute a risk management plan to reduce the risks particular to their operations and eliminate the danger of cyber-attacks. A cyber risk management plan can assist decision-makers in managing the risks associated with it daily. Evaluating cyber risk helps the company determine the probability of any cyber-related attacks they may encounter. Furthermore, a cyber risk management strategy can assist the company in recognizing significant threats, which will aid in allocating money and effort to the most appropriate areas.

Several reasons exist for the need to introduce a cyber risk management plan, including:

  • Avoiding attacks and countering cyber-assaults: By executing a cyber risk management system, threats to the company are identified by the security, IT, and other teams. As a result, dealing with threats can be done effectively, and assigned implementation seams can implement suitable defensive measures to reduce cyber-attack threats.
  • Lowering costs and preserving profits: Money is the goal of numerous attackers. As a result, any company is a target. A cyber risk strategy can reduce risks and minimize the company's loss of revenues. Even meeting regulations related to cyber risk will assist the company in steering clear of considerable penalties for non-compliance.

Build a good reputation

Demonstrating that the company gives importance to cyber security can help gain an advantage over competitors. In addition, showing concern for customers' or clients' data will assist in earning their trust and leading to higher customer loyalty and long-term success.

Companies should take steps to strengthen their cyber protection strategies. First, be aware of potential risks and how to deal with them. Know how to comply with the relevant laws and regulations of the business, such as PCI DSS, HIPAA, and GDPR. Finally, regularly update policies and procedures to reflect any new technology and threat vectors.

Focus on critical issues

When it comes to cyber security, risk management is a priority, as it considers the potential harm that cyber threats can cause. However, it is not realistic for any organization to expect to be able to prevent every vulnerability or attack. Therefore, risk management for cyber security focuses on the most critical issues to the business by considering the weaknesses, the evolving threats, and the most pertinent attacks.

The math

Generally, cyber protection dangers are managed through a risk assessment that ascertains cyber threats depending on the general risk equation: Risk of cyberattack = Impact of attack times x Probability of attack (Risk = Consequence x Likelihood). However, the mathematics behind this formula are often changeable and subject to personal interpretation, as each element is composed of numerous factors that can be hard to quantify numerically.

  • Consequence: The results of a data breach can be severe, with financial, reputation, legal, regulatory, and other matters. Nevertheless, it is still hard to measure the magnitude of the aftermath. A company may suffer a breach and not even be aware of it. The company might not receive a severe reprimand in some cases, while others may be harshly penalized. The outcome is impossible to predict.
  • Likelihood: It's tough to measure the probability of a successful attack on your unprotected weaknesses, no matter how many singular solutions you put into effect. Cyber security is typically provided as individual point solutions to protect against well-understood attacks aimed at particularly known susceptibilities. Nevertheless, it's impossible to guard against all weaknesses against any number of unknown types of attacks. Because it is not feasible to shield all vulnerabilities, there is no way to quantify the probability of a successful attack on your unprotected weaknesses.

Attacks can affect primary corporate goals, regulatory outcomes, and consumer attrition. The intensity of these potential repercussions is linked to the asset's value, which affects the company's mission, operation, or consumer confidence. Additionally, the probability of an attack can be influenced by various factors, such as the attractiveness of the asset to attackers, any existing vulnerabilities, and the countermeasures already in place

No FUD Zone

Constructing risk assessments is far from an exact exercise. Still, even the most intricate modeling for gauging cyber risk lays out a plan for opting for a well-organized system regulating security protocols. This system leads to investments that minimize an organization's vulnerability to cyber threats by bettering controls that diminish the chances of being attacked and reducing the business consequences of the most hazardous threats.

This system differs from investing based on subjective responses based on instinctive reactions to vendor sales techniques designed to instill fear, uncertainty, and doubt (FUD) regarding threats that may not necessarily be a great danger to the business.

Risk Management Frameworks

Have a rapid opinion of your risk position and make a plan to reach where you desire to be. Analyzing and understanding cyber risk management systems offer a predictable and methodically drafted way of evaluating business necessities and recognizing any flaws in cyber safety, investigating any discrepancies in existing control, allocating future cyber investment based on risk review, executing those approaches by utilizing a mix of security controls and best practices, and evaluating and scoring cyber security plan progress continuously.

  • NIST CSF: The NIST Cybersecurity Framework (NIST CSF) is a commonly used system for managing cyber threats. It provides a thorough overview of the five essential stages of cyber risk management: identification, protection, response, and restoration.
  • DoD RMF: The Department of Defense (DoD) has established Risk Management Framework (RMF) as a set of guidelines for its agencies to measure and regulate the cyber security risks related to their IT resources. RMF divides the process of creating a cyber risk management approach into six phases: categorization, selection, implementation, evaluation, authorization, and surveillance.
  • ISO: The International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC) developed ISO/IEC 27001, one of the most long-standing security frameworks, offering a stringent and verifiable set of regulations to handle the risks presented by information systems. For instance, ISO 31000 presents principles and guidelines for reliable risk management of organizations, which involves cyber risk management.
  • FAIR: The Open Group has devised the Factor Analysis of Information Risk (FAIRTM) system for evaluating cybersecurity threats and helping enterprises make prudent decisions regarding their security practices. This framework provides business leaders, cybersecurity specialists, and risk management personnel with the data required to assess information risks.

Other cyber security control frameworks exist, such as the Center for Internet Security (CIS) Controls. These cyber security regulations and compliance frameworks primarily focus on technology and the most reliable strategies for avoiding potential threats and mitigating risks.

To summarize

Every company needs to have a Cyber Risk Strategy. Assess the risks, potential outcomes, and probability of the risks occurring. Rely on an accepted industry framework. Each approach works differently, so look at customer contracts, regulatory expectations, and international needs. The goal should be to keep the risks within the acceptable range for the business. The CEO or other designated spokesperson should apprise the company's board, investors, and clients of the strategy. It is essential to present it comprehensibly.