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Most people think of cyber risk as potential harm from a company’s IT and communications systems. This narrow view is because businesses report data infringements and cyberattacks due to failures in an organization’s information technology systems more frequently.
However, the term cyber risk goes beyond this. A cyber breach can lead to business disruption, reputational damage, intellectual property theft, and productivity losses. All these count as serious cyber risks. These risks can jeopardize the organization’s operating ability, affecting overall business continuity.
Therefore, businesses must take a broader approach to cyber risk management. The approach should focus on gaining comprehensive enterprise-wide visibility into an organization’s overall cyber risk posture with a real-time view of cyber risks including those arising from third parties. Risk quantification, prioritization and communication abilities that relay key insights to the Board are important in a holistic risk management approach. However, this is not easy.
Many businesses have recognized the importance of managing cyber risk and have already moved it up the priority ladder by allocating increased resources to combat cyber threats. In 2019, a risk perception survey showed 79% of businesses placed cyber risk among the top five business priorities. But what is stopping companies from managing cyber risk more effectively?
Top challenges in cyber risk management
The increasing pace of digital transformation is expanding the attack surfaces making the risk landscape complicated to predict. Adopting newer technologies and strategies like engaging third-party suppliers, enabling remote access, using mobile services, and outsourcing services increases risk exposure.
So, while leaders recognize the need, they still struggle with having visibility and access to data, how to measure the potential impact, and most importantly how to communicate to the Board. Let’s look at the top challenges businesses face in managing cyber risk.
Lack of risk visibility: CISOs and security teams tasked with protecting their IT assets from ransomware and phishing attacks don’t have the tools capable of a holistic unified view of risks and trends that will help business leaders respond faster to emerging risks. A cyber risk from an accidental cyber-breach from a third-party vendor or a partner outside the company can disrupt the entire supply chain, adversely affecting the business.
Businesses need solutions with actionable threat intelligence to safeguard the organization from bad actors. They need access to solutions that can identify all emerging threats and provide better visibility of risks relevant to their business. Continuous Control Monitoring (CCM) is an automated set of technologies that test and monitor systems and business functions continuously. The technology helps risk professionals assess security controls, identify gaps and resolve issues proactively.
Quantifying and prioritizing cyber risk: Businesses usually struggle with prioritizing cyber threats because they lack the tools required to quantify risk. Business leaders can’t discern which risks they should address without quantifying risk. However, using the right tools and solutions, businesses can assess the impact of cyber risk in dollar value.
Decision-makers can utilize this information to prioritize risks and investments by quantifying the actual financial impact of the risks. Cyber risk quantification helps organizations understand where they should invest and how much investment is good enough.
Risk quantification helps decision-makers proactively identify the risks and build robust security controls around them. Business leaders can use the information to decide on measures that lead to greater resilience and better business performance. Cyber risk quantification techniques and tools that help communicate risk in a simple, easy-to-understand way are practical when quantifying how much operational disruption the business is willing to accept in monetary terms.
Inability to effectively manage cloud risks and sophisticated ransomware: With more businesses moving classified data to the cloud, security teams must ensure they have the appropriate configuration and security procedures in place or risk data breaches. Sometimes the incident response teams lack the necessary skills and tools to perform forensics on cloud data exposing the business to risks from the cloud.
A secure cloud strategy, an in-depth understanding of the cloud providers’ security stack, and investments in the right platforms to automate security functions are crucial to managing cloud risks. For example, Continuous control monitoring (CCM), the automated and continuous testing and monitoring of cloud security controls, enables organizations to proactively identify vulnerabilities, improve cloud security and compliance posture, and reduce audit costs.
Communicating cyber risk to the board: CISOs often find it hard to justify cyber risk investments to the top management. Security leaders must communicate cyber risk so that the board and the rest of the C-suite can understand easily. Some are not savvy about the technical details of cyber risk. If CISOs cannot communicate and quantify their cyber risk program, the board won’t fund priority projects, leading to data breaches. Businesses, therefore, need solutions that help significantly improve the CISOs’ ability to report to the board effectively and systematically.
A modern approach to cyber risk management
Managing cyber risk in today’s evolving risk landscape is complex and challenging. Cyber threats do not exist in isolation. The proliferation of mobile devices and the Internet of Things (IoT) has increased the potential access points. For example, hackers can exploit data extracted from web scraping and use it to carry out phishing attacks. A single breach can result in a domino effect of risks with severe consequences.
The modern approach to risk management calls for cyber risk leaders to understand the interconnected risk landscape and the cascading impact of risks. For this, businesses must invest in purpose-built cyber risk software solutions conforming to established security standards like ISO 27001, NIST CSF, and NIST SP800-53. This will help CISOs, risk professionals, and security teams build a mature cyber risk program based on industry best practices and frameworks thereby strengthening their organization’s overall cyber governance, risk, and compliance posture.