What Is Cybersecurity Risk Management? (With Steps)

By Indeed Editorial Team

Published September 5, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Various organizations require effective measures to limit the effects of cyber threats and prevent cyber attacks. These measures often include the efforts of team members to secure private information from unauthorized access. Knowing the importance of managing cybersecurity risks can help organizations secure their projects and processes from security breaches and malware. In this article, we define cybersecurity risk management, highlight how to implement a cyber risk management plan, provide the steps for managing cyber risks, and review the benefits.

What is cybersecurity risk management?

Cybersecurity risk management is a business procedure of discovering, analyzing, examining, preventing, and resolving cyberattacks. Professionals who supervise this business procedure have expert information security, security protocols, and information assurance knowledge. Cyber risk management usually involves creating firewalls, scanning for security gaps, developing effective solutions, and providing security updates. To manage cyber risks, an organization's team members protect different departments' business processes from unauthorized users.

Cybersecurity risk management is essential because of digital transformation and technological evolution in organizational processes. Companies now rely on the internet and use digital tools to perform and record their operations, increasing the possibility of security breaches. Effective risk management helps them devise strategies to mitigate and prevent evolving cyber-related risks and unexpected threats.

Read more: What Is IT Risk Management? (With Benefits and Tips)

How to implement a cyber risk management plan

Consider the steps below for implementing a risk management plan:

1. Discover cybersecurity risks

Cybersecurity risks are potential hazardous actions that may lead to the malfunctioning of an IT system or the loss of private information. If adopting a risk management plan in an institution's operations, the first step is discovering the potential risks. To identify cyber risks, you require an understanding of cyber threats, vulnerabilities, and the consequences of combining both technological concepts. Threats are factors or circumstances likely to adversely affect an organization's activities and harm the information system. They can come in different forms, like human errors, viruses, phishing attacks, structural failures, and, sometimes, natural disasters.

Vulnerabilities refer to the weaknesses or flaws in the organization's information system, which grants access to threat activities. If threats and vulnerabilities merge in an organization's information system, it can lead to a situation where the threats take advantage of the vulnerabilities and cause damage. If creating a management plan for future risks, examine the impact of this potential occurrence.

Related: What Is Spyware? (With Definition and Cybersecurity Skills)

2. Assess cyber risks

After discovering potential cyber risks, the next step is to assess them. This can help you determine the importance of security measures in the organization's operations. Team members can also develop and test different approaches to control future exposure when assessing cyber risks. The first step is to list the institution's assets and arrange them in order of importance. After discovering the top-priority assets, the next step is to consider potential threats and vulnerabilities and suggest effective measures to control the consequences.

You can then evaluate the chances of a threat event and its severity. Your assessment can help you make the right risk management decisions and maintain the institution's IT environment.

3. Evaluate various cyber risk management measures

Consider different cyber risk management measures and choose one that can safeguard the organization's information effectively. This step is crucial because it helps you develop a practical measure to mitigate the consequences of cyber threats. You can adopt a technological or best practice method, or even both. Examples of cyber risk management measures you can choose from include:

  • Software updates

  • Training team members on cybersecurity

  • Multi-factor authentication

  • Regular data backup

Another essential cyber risk concept to note is residual cyber risk. Residual cyber risk remains after applying all the risk management measures. If you experience this, you can either adapt to the threat or employ the services of a cyber risk insurance provider. If you adapt to the risk, you can develop strategies to keep high-priority information in a controlled environment.

Related: Authentication vs. Authorization (What's the Difference?)

4. Adopt continuous monitoring

Continuous monitoring is a business process that financial institutions follow to ensure that their business records are intact and consistent. This process helps them provide updated information to customers when requested. A few factors to monitor include:

  • Internal IT usage

  • Regulatory change

  • Vendor risk

Related: What Are Monitoring and Evaluation Tools? (With Tips)

How to manage cybersecurity risks

Follow the steps below to manage cybersecurity risks:

1. Learn IT elements and assets

Team members require extensive knowledge and experience working with IT instruments to manage cybersecurity risks effectively. You can safeguard critical and valuable assets if you understand how to work with IT tools, such as digital assets, communication endpoints, third-party components, and technological devices. Your knowledge can help you monitor the IT environment and detect the activities of third parties.

Related: IT Asset Management (ITAM) and How It Can Help Businesses

2. Adopt a risk-based approach

If managing cybersecurity risks, it's essential that you adopt a risk-based management approach. While it may be impossible to avoid cyber risks entirely, you can invest in preventing them by focusing more on restricting elements that can attract breaches and grant easy access. Typically, the significant purposes of risk management include:

  • Analyzing cyber risks or attacks

  • Prioritizing cyber risks using assessment tools

  • Following technical strategies to reduce cyber risks

3. Enforce a cybersecurity risk management strategy

Create a risk management strategy that safeguards the organization's critical data from third parties and malware. It's essential that you build a proper and comprehensive approach to guide team members' operations and reduce cyber risks. Evaluate the organization's risk tolerance and how difficult it is for third parties to access high-priority information. When creating a risk management strategy, consider the role of team members, incident response, and escalation plans.

Share the strategy with team members to know their responsibilities in following the management plan. Usually, security breaches happen because of team members' actions. For example, clicking on an unknown link while performing your official responsibilities can render the organization's information vulnerable to security breaches and cyberattacks. Team members can reduce avoidable errors if they know their responsibilities and safety measures.

Related: A Guide to Risk Management Process (With Practical Examples)

4. Implement risk management in company culture

If team members understand the institution's risk management strategy and follow the principles, they can effectively regulate cyber risks. To implement cyber risk management, you can document and share the plan with them. Security systems require regular updates to remain effective and handle any new cyber threat trend. Inform team members when there's an important update so they can quickly adapt to evolving cyber threats.

Related: Why Risk Management Is Important (With Strategies)

5. Adopt strict security protocols

Immediately after deciding on the risk management strategy, it's essential to implement a strict security protocol to achieve its goal. Institutions that adopt strict security protocols can handle serious cyber threats quickly before it escalates into a significant issue. A few strict security protocols you can adopt are:

  • Equipping all the technological devices in the IT environment with authentication policies

  • Restricting access of BYOT (bring your own technology) devices to the provision of access codes

  • Introducing automated patch management in the institution's operations

  • Implementing security protocols for team members, even those who work remotely

  • Enforcing regular updates and data backups

  • Consolidating the institution's data in a single location to make safeguarding easier

  • Installing an efficient firewall to monitor traffic and detect potential cyber threats

Related: What Is a Network Firewall? (With Key Terms and Benefits)

What are the benefits of cyber risk management?

Institutions implementing cyber risk management in their operations prioritize cybersecurity and safeguarding digital information. This strategy helps establish a framework that guides the activities of team members in the institution. Below are the primary benefits of cyber risk management:

  • Supports the fast identification and mitigation of cyber risks

  • Fosters a robust security compliance

  • Promotes the reputation of the institution

  • Contributes to increased business revenue

  • Establishes a competitive advantage for the organization

  • Reduces the possibilities of system downtime

  • Helps organizations become unsusceptible to cyber risks

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