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How To Perform A Cyber Risk Analysis? 4 Easy Steps

Cyber-attacks, data breaches, and the potential for identity theft have been making big news headlines. It’s not just what happens when technology fails that we need to worry about. But also the lasting damage caused by events such as these.

Cyber-attacks can cause financial loss or even casualty numbers in extreme cases as primary services go offline. With results like these at stake, organizations should consider performing risk assessments on their IT systems and networks using a proper methodology to reduce the impact of these attacks.

What is a Cyber Risk Analysis?

A cyber risk analysis is a way of designing a strategy that will defend your organization from any attempts at unauthorized access from an outside party, theft of confidential data, or other malicious actions. The analysis will identify the risks associated with your company’s IT infrastructure and then put into place safeguards to protect against these threats.

Cyber Risk Analysis Process

The steps include:

1. Specify Acceptable Levels of Risk

The first step in this process is to establish acceptable levels of risk for your organization. What is an adequate level of risk? This will vary from business to business and depend on some factors, such as the industry you are in, the size of your company, and how much you are willing to spend on mitigating risk.

Once these levels have been established, it is essential to choose a risk assessment methodology that will be most effective for your company.

Acceptable Levels of Risk

2. Choose a Risk Assessment

Various methods can be used for cyber risk assessment. One popular method is called the risk management pyramid. This approach breaks down the risk assessment process into five steps:

  1. Identify the assets that need to be protected
  2. Assess the vulnerability of these assets
  3. Estimate the likelihood of a threat actor exploiting a vulnerability
  4. Quantify the damage that a successful attack could cause
  5. Rank and prioritize risks based on these factors

After completing this analysis, organizations can implement security controls to protect their systems and mitigate the identified risks. Security controls can be anything from firewalls and antivirus software to training employees to spot phishing attacks. The important thing is that these controls are explicitly tailored to your company’s needs and risk profile.

Types Of Cybersecurity Risk Assessment

The most common types of risk assessment include:

1. Quantitative Risk Analysis

This type of assessment uses mathematical models to calculate the probability of an event occurring. It can be used to prioritize a list of risks, determine the level of risk exposure, and decide on an appropriate course of action.

2. Qualitative Risk Analysis

This uses subjective ratings instead of numeric scores. The risk is scored qualitatively based on business impact and the likelihood of occurrence assigned by a security team or individual. One drawback to qualitative assessments is that it can be challenging to arrive at a consensus about the numerical rating for each factor. It is without conducting several rounds of review and discussion amongst stakeholders.

Cyber-security Risk Assessment Components

The cyber risks assessment commonly include the following components:

1) Threat

A threat is what can exploit a given weakness (vulnerability). Examples include computer viruses and a lack of sufficient resources for intended tasks. In order to conduct an IT risk assessment, it is essential to identify and understand all possible threats to the system.

2) Vulnerability

A vulnerability is a weakness in security that a threat can exploit. For example, a system may be vulnerable to a computer virus if it does not install the latest antivirus software. To reduce risk, it is crucial to identify and fix vulnerabilities in systems before threats exploit them.

3) Impact

The impact of an event is how much damage or harm it would cause. An event’s impact can be categorized as either business or technical.

  • Business impacts include things like loss of revenue, loss of customers, and damage to company reputation.
  • Technical impacts include data loss, system downtime, and compromised security.

To conduct an IT risk assessment, it is important to understand the system’s potential impacts of threats and vulnerabilities.

4) Likelihood

The likelihood is how likely it is that a threat will exploit a given vulnerability. For example, the possibility that a computer virus will infect a given system depends on whether or not the system has current antivirus software installed and if the user appropriately updates the software with new virus definitions as needed. When performing an IT risk assessment, we need to consider all possible threats and their associated likelihoods to adequately assess and prioritize risks.

Performing a cyber risk analysis can seem daunting, but following these steps will help you systematically assess and address your organization’s cybersecurity risks. By understanding the acceptable levels of risk, selecting an appropriate assessment methodology, and prioritizing your chances, you can ensure that your business is best protected against potential cyberattacks.

Risk Assessment

3. Prioritize Risks

Some risks may be more important than others. For example, a chance that leads directly to the loss of life would take precedence over a threat that causes minor damage, such as loss of money or data.

When prioritizing risks, cyber security managers should consider:

  • The impact on an organization’s assets if a threat becomes a reality, e.g., how much people’s private information is exposed?
  • The likelihood of the threat happening, e.g., what are the chances of a hacker successfully breaching defenses and stealing confidential data?

Likelihood multiplied by consequences equals risk. E.g., If there is little chance that an attack will happen but could cause widespread embarrassment for the organization, this must be taken into account when deciding which risks have the highest priority. You can also check for the guide to prevent information leakage for further help.

4. Implement Security Controls

Once the risks have been identified, it is necessary to put security controls to mitigate those risks. Security controls can be split into two categories: preventive and detective.

  • Preventive controls are designed to stop a threat from happening in the first place, e.g., firewalls that block access to certain parts of the network from unauthorized users.
  • Detective controls are used to detect threats that have managed to get through preventive controls, e.g., intrusion detection systems that alert security staff when someone is trying to hack into the network.

Summing Up

To reduce cyber risk, organizations need to deploy a blend of both preventive and detective controls across their entire IT infrastructure. This will help protect the organization’s data, network, and critical infrastructure.

Although cyber risk can never be eliminated, implementing security controls should reduce the likelihood of a successful attack being carried out against an organization.

 

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