How to Conduct an Effective Cybersecurity Risk Assessment

In today’s digital landscape, it is not a question of if an organization will experience a cyber risk, but when. It is therefore essential for anyone working in information security to be fully informed and equipped when it comes to risk management, measuring, and evaluation. 

A cyber risk assessment is a document of an organization’s process of identifying digital assets, detailing potential threats, determining the likelihood of a data breach, and establishing controls to mitigate those risks. This document works to keep stakeholders informed, support proper responses to identified risks, and provide an executive summary to aid in security decisions. 

Risk assessments are a key part of becoming cyber resilient, but it can be difficult to know where to start. This article will walk you through when and how to conduct an effective cybersecurity risk assessment.

When should you perform a risk assessment?

All cybersecurity strategies should start with a risk assessment

A cybersecurity risk assessment is the foundation upon which everything else is built. Engaging in detailed asset management, review, and control-setting practices arms the organization with all the information it needs about its IT landscape and all the associated risks. 

This can be time-consuming, but it is a necessary process. Without this solid foundation of knowledge, organizations may fail to implement the proper controls further down the line.

Yearly assessments keep you informed about potential threats

Most compliance regulations mandate that organizations review their risk assessment at least once per year. Organizations should document this annual review by taking the minutes during a risk assessment meeting to prove their compliance. 

Don’t wait for a reason to do your yearly check. For example, if there was an issue with your outbound call center solutions, it would be preferable to identify the risk early during a routine check, rather than while doing damage control after a customer data breach.

When adopting new tech or systems in your organization

When planning to make any significant changes to your IT stack, it is important to formally review your cybersecurity risk assessment. While the definition of “significant changes” is subjective, it’s best practice to review after introducing any innovative technology which alters your infrastructure and could open your system up to new risks. 

For example, when onboarding new virtual PBX solutions, organizations should review their cybersecurity to make sure no sensitive data will be compromised in the transition to a new method of communication. Similar events triggering the need to review risk would include the addition of a new firewall provider, or the migration of a database from on-premises to cloud.

Following major changes such as mergers or upgrades

Structural changes, such as one company merging with another, can cause increased security risks. With operations in transition, high-value data becomes more vulnerable to threats. In Devsecops IT culture, responsibility for delivering secure software is shared between development and operations teams. 

When businesses merge, then, this becomes a collaboration between the development and operations teams of multiple organizations – allowing more potential for malicious actors to disrupt the transfer and sharing of data. 

It is important, therefore, to conduct thorough risk assessments and identify additional measures which need to be in place during the period of change.

After security incidents to determine and prevent breach

When a security incident takes place, a risk assessment is a crucial tool. It’s important to investigate root causes and try to get to the bottom of what went on as swiftly as possible. You want to gain a thorough understanding of the specific vulnerabilities and weaknesses in the existing system which allowed the breach to occur. 

These insights will be valuable for the continuous improvement of your security system – they tell you what needs to be fixed to prevent the same incident in future. The risk assessment document will also be useful for legal proceedings, insurance claims, and compliance reports, and for ensuring transparent communication with affected parties.

How to conduct an effective cybersecurity risk assessment

Determine the scope including assets, systems, and data

The first step is about identifying assets and determining the scope of the assessment. Thanks to visibility issues in increasingly complex systems, this is often the most difficult part of the process. For instance, as businesses move from monolithic to microservice architecture (here’s a good monolithic application example), data becomes spread across a larger application comprising multiple independent databases and modular services communicating via APIs. 

Start by listing valuable assets. This includes all devices on the network, company and customer data, and every location which stores, processes, and transmits data. For each one, gather information such as its purpose, end-point users, network topology, security controls, and functional requirements. 

Additionally, you should identify risky users which may increase security risk. You’ll need this comprehensive list of all assets and users later on when making decisions about which assets to prioritize.

Evaluate and test infrastructure vulnerabilities and weaknesses

A vulnerability is a weakness which could be exploited to steal data or otherwise harm the organization. Threats include system failure, human error, and adversarial threats like hackers and malware. Organizations must guard themselves against unauthorized access, data leaks, and misuse of insider information. 

But evaluating weaknesses is not just about what “could” happen; it is a realistic assessment of what is most likely to happen based on the current security infrastructure. Vulnerabilities can be found and tested via vulnerability analysis, auditing, and software security analysis.

Classify data based on sensitivity and importance

Now you know which assets you are protecting, and which weaknesses need to be patched. Armed with this information, you can categorize your organization’s data according to its sensitivity and importance. You’re looking for critical data that would have the most significant impact on operations and stakeholders if it was to be compromised – in terms of money, reputational damage, and customer trust. 

You should also keep in mind which data is in the most precarious position, based on the vulnerabilities and weaknesses you have identified. Think about how bad the impact of a breach would be, but also how likely such an event is. 

So, if you had a database valued at $50 million. In the event of a breach, you estimate that at least half the data would be exposed before it could be contained, meaning a loss of around $25 million. 

However, if this is an unlikely possibility – say, a one in fifty-year occurrence, this would be equivalent to losing $25 million every 50 years, which translates to half a million per year. This estimation is extremely helpful when setting the annual budget for your data security program.

Assess your organization’s regulatory compliance

You also need to think about compliance risk: would a data breach lead to a compliance violation? If there are fines or penalties involved, this would be an expensive mistake. Conduct a thorough review of all security operations to identify any areas where you are not fully compliant with necessary regulations. 

One of the reasons compliance is so difficult is that businesses often have data spread across so many devices, storage systems, databases, and networks that it is hard to look at every aspect of the system at once and identify shortcomings. Using a data warehouse, you can access current and historical data from multiple sources in one place for easier insights and reporting.

Develop a risk mitigation plan for identified vulnerabilities

Based on the data you have collected, create a comprehensive risk mitigation plan. This should include strategies to address each vulnerability you identified, be it technical solutions, process improvements, or alternate measures that minimize the likelihood and impact of a potential security incident. 

Risk mitigation controls are your first line of defense. For vulnerable devices, typical controls  include installing anti-virus software, encrypting data, updating security patch policy and processes, and hardening systems. In terms of storage, processing, and transmission risk, mitigation controls may be things like virtual private networks (VPNs), firewalls, or network segmentation. 

There are also user access mitigation controls, such as limiting access according to privilege, using role-based access controls (RBACs), implementing multi-factor authentication (MFA), or even passwordless authentication. 

The more specific you can be about the necessary fixes, the better. That’s why the identification stage was important: you should have a detailed understanding of your entire digital ecosystem. For example, best practices when mitigating threats in CI/CD environments will be different to traditional on-premise systems. Understanding these nuances allows for the implementation of mitigation controls specific to the situation.

Provide cybersecurity awareness training for employees

Just as you offer training on more basic IT concepts to answer employee questions such as what is a data warehouse, you should absolutely train your staff on cybersecurity. Don’t let human error be a bigger factor in cybersecurity incidents than it has to be. 

Make sure your teams are up-to-date on the latest phishing scams and best practices to stay safe. Educating everyone on the importance of cybersecurity empowers individuals to keep their own devices secure, supporting and enhancing the overall security posture of your company.

Evaluate the security practices of third-party partners

It is vital to ensure that third-party partners, suppliers, and vendors meet the same security standards as your organization. Assess cybersecurity practices of all external partners, establish clear guidelines, and schedule regular assessments. 

Moreover, with the increasing prevalence of AI in communication industry solutions, it is especially important to access the practices of partners leveraging artificial intelligence. Understanding the associated risks and implementing appropriate security measures is key to safeguarding sensitive information in AI-powered platforms or communication tools.

Maintain records of risk assessments and actions taken

The process of undertaking a risk assessment is valuable, but equally important is the documentation of the process. Businesses need to keep thorough records of each risk assessment, detailing assets, vulnerabilities, mitigation controls, and actions taken. This record is a useful tool, not only serving as a reference for future security risk assessments but also supporting compliance reports and future audits.

Conclusion

By investing the time to identify and document all assets, weaknesses, and mitigation controls, you can be sure to conduct an effective cybersecurity risk assessment. However, this is not a static document. 

You should be continually updating your risk assessment to keep up with the dynamic and evolving risk landscape. Continuous monitoring and improvement are key to remaining vigilant against cyber threats.

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