According to IBM and the Ponemon Institute, the average cost of a single data breach in 2020 was a staggering $3.86 million – and this does not even take into account the long-term damage to a brand’s reputation that such a breach can cause. Given the enormous consequences of failing to protect your organization’s sensitive information along with the ever-rising frequency of cybercrime, ensuring that you are prepared and well-defended against such attacks is now more vital than ever before.
No matter the size of your organization, creating a comprehensive approach to information security is essential if you want to protect your company’s sensitive data as well as avoid the crippling consequences of extended downtime reputation damage – and creating an effective cybersecurity plan begins with conducting a cybersecurity risk assessment. In this article, we’ll dive into what a cybersecurity risk assessment is, why it is vital, and how you can go about conducting a cybersecurity risk assessment for your own organization.
What is a Cybersecurity Risk Assessment?
Conducting a cybersecurity risk assessment means analyzing both your company’s assets and procedures in order to identify weaknesses that could make you vulnerable to a cyberattack. Once those weaknesses have been identified, they are then ranked according to which ones pose the most serious and immediate threat so that you can go about the risk mitigation process in order of importance.
A cybersecurity risk assessment is concerned with answering questions such as:
- What are my organization’s most important technological assets?
- What is my organization’s most sensitive data?
- What relevant cybersecurity threats does my organization face?
- What will the impact be if those threats come to fruition?
- What are the internal and external vulnerabilities of my organization?
- What is the likelihood that those vulnerabilities will be exploited?
- What level of risk is acceptable for my organization?
- How can the identified vulnerabilities best be addressed?
By answering crucial questions such as these, a cybersecurity risk assessment provides you with a top to bottom view of your organization’s cybersecurity, enabling you to highlight the areas of most concern via a risk analysis of the identified vulnerabilities so that you are able to begin developing a plan to address those vulnerabilities in the most effective way possible.
Another great way to go about conducting a cybersecurity risk assessment is to follow the guidelines set forth by a cybersecurity assessment framework. The NIST Cybersecurity Framework and the ISO 27000 standards are two such examples of proven cybersecurity assessment frameworks that may prove incredibly beneficial in helping you assess your own organization’s cybersecurity.
The NIST Cybersecurity Framework was developed in collaboration with the government and the private sector and is the most commonly used cybersecurity assessment framework for U.S companies. This framework was designed to help address the most essential components of cybersecurity, including identification, detection, protection, response, and recovery. The ISO 27000 standards, meanwhile, was developed by The International Organizations for Standards and is designed to help organizations assess the security of its third-party vendors in addition to its own internal information. While these are two examples of the broader and more commonly used cybersecurity assessment frameworks, it is worth noting that there are a wide range of various frameworks available depending on your industry and region.
Why is a Cybersecurity Risk Assessment so Important?
There are a number of convincing reasons why every business should conduct a comprehensive cybersecurity risk assessment at least once every two years. Of course, better protecting your company against threats such as a ransomware attack that could grind your entire operation to a halt or data breaches that could expose your customers’ data and ruin the reputation of your brand in the eyes of both your customers and stakeholders is by far the biggest reason why cybersecurity risk assessments are so vital. Beyond this, though, conducting regular cybersecurity risk assessments also helps your organization maintain compliance with the regulatory requirements such as HIPAA’s standards for healthcare organizations, the PCI DSS standards, and the GDPR standards and avoid the penalties associated with noncompliance. Lastly, conducting a cybersecurity risk assessment provides you and your employees with a better understanding of your organization, its defenses, and its vulnerabilities – all information that could prove incredibly valuable if you ever find yourself scrambling to respond to a cyberattack.
By helping you strengthen your company’s firewall against cyberattacks, conducting a cybersecurity risk assessment is able to reduce the costs resulting from security incidents and the downtime they cause, help you form a better understanding of your vulnerabilities and where to allocate your resources, help you better secure your data to avoid breaches and the associated financial implications and help prevent the theft of your sensitive data, intellectual property, and trade secrets.
How to Conduct a Cybersecurity Risk Assessment
Conducting a cybersecurity risk assessment starts by choosing the framework that you wish to follow. As we’ve already discussed, there is a wide range of such frameworks to choose from depending on your industry and location, and taking the time to find a framework that best fits your company’s unique IT infrastructure is a vital first step in the cybersecurity risk assessment process. With that said, though, the basic steps of a cybersecurity risk assessment can be summarized as follows:
Step 1: Determine the Value of Your Data
Not all data is created equal, and some information that your company collects and stores is more important to secure than other information. The first step in conducting a cybersecurity risk assessment, therefore, is to identify the data that needs protecting the most. This could include data that is vital to the operation of your company as well as sensitive data such as customer credit card information that could cause a severe fallout if it fell into the wrong hands. Sensitive data such as trade secrets and customer information is always high-priority due to the long-term damage that the theft of such data can cause. Data that is critical to the day-to-day operation of your company is certainly important to protect as well, though, since the loss of this data could lead to extended downtime for your company.
Start your cybersecurity risk assessment by taking a hard look at all of the data your company stores, breaking that data down into different categories, and prioritizing those categories of data based on how important it is to keep them secure.
Step 2: Identify and Prioritize Your Assets
Once you’ve determined your organization’s most vital data, the next step in a cybersecurity risk assessment is a highlight the information assets associated with keeping that data secure. This of course includes the hardware and software where that data is stored but also includes assets such as the employees who have access to that data, your physical security controls, and your IT security protocols. The assets that you will want to examine can be broken down into these four categories: people, processes, technology, and data – and it’s important to analyze each one in order to determine how large of a role each asset category as well as each individual asset plays in your overall security. After these assets have been identified, you will then want to rank them according to the value of the data they help protect as well as the importance of the role they play in that purpose.
Step 3: Identity Threats
Having determined the data that needs protecting the most and the assets associated with doing so, you will now want to go about trying to identify the various cyber threats posed to your data’s security as well as the likelihood of the threats becoming a reality. Identifying the threat sources posed by cybercriminals and the various attacks they might use to compromise your data is a great place to start. Ransomware, malware, phishing attacks, denial of service attacks, and adversarial attacks such as corporate espionage are all common examples of concerning cybersecurity threats that your organization may be vulnerable to. But identifying cybersecurity threats doesn’t end with identifying the threats posed by cybercriminals. In addition to outside attacks, other identified risks that a cybersecurity risk assessment should address include threats such as system failure, human error, and natural disasters.
Step 4: Identify Vulnerabilities
Once you fully understand the various cybersecurity threats faced by your organization you can go about searching for vulnerabilities within your information systems that could leave you unguarded against those identified threats via penetration testing. Vulnerabilities in your company’s cybersecurity can take a number of different forms, including vulnerabilities within the software and hardware that you rely on, vulnerabilities within your policies and employee training protocols, and vulnerabilities within the physical defenses of your assets. If you would like to better understand the various vulnerabilities that your organization might have, the National Institute for Standard and Technology’s vulnerability database is a great place to begin your research.
Step 5: Analyze Your Controls
Having identified your company’s most valuable and sensitive data, the assets associated with data protection, the threats posed to that data, and the vulnerabilities that put your most important data at-risk, the next step in a cybersecurity risk assessment is to analyze the controls you have in place for mitigating your company’s threats and vulnerabilities and implement new controls if necessary. Controls designed to shore up your vulnerabilities and protect against cybersecurity threats can take a wide range of forms, from technical controls such as encryption, continuous data leak detection, and two-factor authentication to nontechnical controls such as your cybersecurity policies and any physical mechanisms used to protect your data (i.e backup servers, physical locks, and keycard access). While many companies try to skip straight to the step of implementing controls such as these, first developing a thorough understanding of your risks, vulnerabilities, and most vital areas of concern is essential if you want to put in place controls that will actually have the biggest impact when it comes to keeping your data secure.
Step 6: Perform an Information Value vs Cost of Prevention Analysis
Before you start implementing a bunch of new controls to better secure your data, you will first want to perform an information value vs cost of prevention analysis.
This analysis considers the importance of securing a certain category of data compared to how much it will cost your company to do so. For example, let’s say that you have identified a threat to your cybersecurity that would cost your company an estimated $1 million if the threat becomes a reality, and let’s say that you have found the likelihood of this threat rearing its ugly head to be about a one in ten year occurrence. In this example, a budget of $100,000 a year to go towards protecting against this specific threat would be justified. By comparing the likelihood of a threat and its potential impact against the cost of preventing it in this manner, you can determine how your cybersecurity budget is best spent. It’s important to note, however, that less obvious impacts of a cybersecurity breach such as damage to your brand’s reputation should also be taken into account during this analysis. Once this analysis is complete, you will be able to formulate a risk management strategy that takes into account the risk level of various vulnerabilities and enables you to allocate your risk mitigation budget in the most effective way possible.
Step 7: Document Your Results in a Risk Assessment Report
Once your cybersecurity risk assessment is complete, the final step in the risk management process is to document all of your findings in a well-organized risk assessment report. This report will serve as an invaluable tool that you can use to train employees, to develop a more effective methodology, and to determine how your cybersecurity funds are best allocated until the time comes for another cybersecurity risk assessment to be conducted.
Ensure Your Protected with Effective Cybersecurity Risk Management
Whether you are in charge of a small business or a massive organization, conducting regular cybersecurity risk assessments in order to evaluate your information security risk is a vital part of keeping you and your customers’ data secure. In recent years, far too many organizations have learned the hard way just how costly failing to develop a security posture that will protect their data from both internal and external threats can be. However, by conducting a thorough cybersecurity risk assessment in order to identify your most valuable data, highlight potential threats and vulnerabilities that might expose that data, and determine how your security budget is best allocated, you ensure that your company is as secure and well-defended as possible as well as streamline your approach to remediation in the event that a breach does occur.