Few things are as crucial to a small business as cybersecurity. Data breaches exposed 155.8 million sensitive records in 2020, and as companies rely more heavily on digital technologies, these breaches become more likely. In the face of these threats, cybersecurity risk management is a must.
What is cybersecurity risk management?
Cybersecurity risk management is the practice of identifying risks and planning defenses. While virtually every business faces cybersecurity threats, what exactly they are and how relevant each type is can vary. This process aims to help your company tailor its cybersecurity strategies to best fit your unique situation.
What are the benefits of cybersecurity risk management?
There are several benefits to cybersecurity risk management. Since recent data shows 43% of cyberattacks target small businesses, it's hard to overlook the advantages.
Having a more reliable cybersecurity strategy in place can also improve your business's reputation. Potential partners and customers will appreciate the emphasis on security, leading to higher loyalty and, thus, revenue.
How to calculate your cybersecurity risk
Effective cybersecurity risk management starts with an assessment of which threats are most relevant to your business. Companies typically follow this equation to discover them:
Risk = Attack's Impact x Attack's Likelihood
This equation is fairly open-ended because each side of it can include many variables, some of which are easy to quantify and some that are not. Consequently, determining risk isn't always an exact science, but it provides a useful starting point. IT departments and security specialists should be able to estimate at least how likely and damaging different types of attacks could be.
Cybersecurity risk management frameworks
While determining cyber risk leaves room for interpretation, several widely accepted frameworks provide a more straightforward path. These are standards that various organizations have established to guide them through the process. The standards often include specific methods for measuring threats, prioritizing cyber defenses, implementing these controls and scoring cybersecurity maturity.
Some companies develop their own frameworks, but following a pre-established one can be beneficial for your business. Since these standards come from industry authorities, meeting them can help you establish trust with potential partners or customers. These are four of the most common risk management frameworks.
1. NIST CSF
Perhaps the most popular risk management framework is the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF). The NIST CSF consists of three main components:
| Core | The core outlines desired cybersecurity outcomes. |
| Implementation tiers | The implementation tiers organize practices into multiple layers, representing many levels of security. |
| Profiles | The profiles offer specific paths to obtain the core's listed results according to an organization's desired tier and other unique considerations. |
2. ISO
The International Organization for Standardization (ISO) provides more than one framework for cybersecurity risk management. The first and most relevant is ISO/ISE 27000, which covers more than a dozen standards for finding and managing cybersecurity threats.
ISO also manages the ISO 31000 standard. ISO 31000 isn't specifically a cybersecurity standard, but an overall business risk management framework that includes cyber-risk management. Consider this framework if your company faces various threats outside of cybercrime.
3. DoD RMF
The Department of Defense (DoD) Risk Management Framework (RMF) is a more industry-specific set of standards. As the name implies, this framework is what the DoD uses to evaluate and address its cybersecurity threats and defenses. It includes strict standards broken into these six steps:
- Categorize
- Select
- Implement
- Assess
- Authorize
- Monitor
The DoD requires risk management in most of the tiers in its Cybersecurity Maturity Model Certification. The CMMC applies to all the department's more than 300,000 contractors.
Even though this framework is designed for DoD contractors, you don't have to be in the defense industry to benefit from it. Its high standards and specific guidance make it ideal for any company.
4. FAIR
The Factor Analysis of Information Risk (FAIR) framework aims to spread awareness and action about information risk. Many industry leaders worldwide abide by these standards. In addition to providing guidance for businesses, FAIR partners with universities to spotlight cybersecurity education.
FAIR claims to offer more explicit and quantifiable guidelines for cybersecurity risk management than other frameworks. It seeks to improve risk management across four categories: people, processes, technology and policies.
Best practices for overseeing cybersecurity risk management
No matter what framework you adopt for your organization, there are a few things to consider in cybersecurity risk management. Even though the process will look different for every business, some steps, practices and considerations remain constant across all environments. These constants can serve as a roadmap for addressing the variables that arise in the process.
Generally speaking, risk management begins with gathering and organizing information about networks, your users, past incidents and similar companies' breaches. From there, you can identify and rank relevant threats, and establish appropriate responses.
As your company begins this process, keep these 10 best practices in mind:
1. Target internal threats.
It's easy to focus on external threats like hackers and malware, but these aren't the only risks your business will face. In fact, internal threats are often more relevant than those from outside your organization. Studies show that these insider threats have grown by 31% in the past two years, costing $11.45 million.
These threats don't often come from malicious insiders, but rather ignorance or complacency. Any effective risk management strategy must address this. More thorough employee cybersecurity training, tighter access controls and similar steps can help mitigate these internal threats.
2. Prioritize risks.
Ideally, your business could defend against all possible threats, but that's an unrealistic expectation. Limited budgets, time and staffing make it impossible to address every risk to the same degree. As a result, after determining what threats your company faces, you must prioritize them by urgency.
It's best to allot the most time and resources to whichever risks are most relevant to your firm. That's why the above equation is so crucial: you must understand the potentially damaging threats to know what deserves their immediate attention. After establishing defenses against these risks, you can move on to lower-priority items.
3. Establish efficient communication channels.
One of the most important – but easily overlooked – parts of cybersecurity risk management is information sharing. Since threats can come from anywhere, all departments, teams and employees should understand them. It should be easy for your IT support to alert different workers of the risks they may face so they can avoid them.
This communication works both ways. You should put channels in place that allow employees to report any potential risks they notice. This will allow your staff to stop more breaches and mitigate the impact of those that do get through.
4. Enable continuous monitoring.
Another critical aspect of risk management is continuous monitoring. Your IT team can't pinpoint risks and their causes if they don't have thorough, accurate logs of what goes on in the network. Similarly, if this record-keeping isn't continuous, your team may not discover cyberattacks until it's too late.
Most organizations don't have the staff to monitor their networks manually, but software solutions can automate the process. Some programs search for breaches, some for unusual user activity and others for dormant malware. No matter what your situation entails, you can likely find monitoring software that fits your needs.
5. Adhere to an established cybersecurity framework.
Even after analyzing what risks your business faces, how to address them isn't always clear. Turning to established cybersecurity frameworks can provide some guidance in this area.
Just as there are guidelines for risk management, several organizations publish overall cybersecurity frameworks. The NIST, ISO and Center for Internet Security (CIS) are all excellent places to start. You don't necessarily have to abide by every regulation within these guidelines, but they can provide a helpful starting point.
6. Develop an incident response plan.
Every cybersecurity risk management strategy should include an incident response plan. This plan should be as detailed as possible, including multiple steps to fall back on should one response fail.
Containing cyberattacks is a time-sensitive issue. Your business can't afford to wait until a threat emerges to determine how to handle it. Each risk needs a corresponding response plan. Codifying and recording these plans will ensure future teams can follow them after the workers who wrote them leave your company.
7. Ensure business continuity.
Along those same lines, risk management strategies should also include a continuity plan. It's unrealistic to think that a data breach will never occur, so you'll need a backup plan to stay functional in an emergency. A continuity plan will ensure critical systems remain accessible while security experts handle a data loss.
What your business continuity plan looks like will vary. In general, though, they include containment strategies, backups of mission-critical data and services, and reliable communication channels.
8. Consider cybersecurity liability insurance.
Liability insurance may be a good option, since no cybersecurity strategy is foolproof. It can help mitigate various costs associated with a data breach, including credit monitoring, alerting affected parties, regulatory fines and lawsuits. The cyber insurance industry has grown as cybercrime becomes more common.
Many top business liability insurance providers offer what is known as cyber insurance coverage. On average, these plans cost $124 per month. Top insurance providers like Chubb and AIG offer cyber insurance. To learn more, you can read our review of Chubb and our review of AIG.
There's no single answer to what the best cyber liability insurance is. Consider your particular needs and budget to find the provider and plan that best fits your needs.
9. Cultivate a culture of cybersecurity.
It's everyone's responsibility in your modern workplace to be mindful of cybersecurity. Threats can come from anywhere, so every worker must do what they can to prevent them. Cybersecurity risk management should be a central part of your company's culture.
Cultivating a culture of cybersecurity starts with education. All workers should know where risks can come from and what practices can prevent them. Managers should lead by example and recognize admirable behavior to encourage more attention to security.
10. Reevaluate cyber risks regularly.
Cybersecurity is an ongoing process. Cybercriminals are constantly finding new ways around popular defenses, so security strategies must likewise adapt to these new threats. Risk management should be a regular occurrence, with teams performing assessments every few years, if not annually.
Penetration testing, where security specialists attempt to break into a network to highlight its vulnerabilities, can help ensure ongoing security. These insights can reveal threats and solutions that initial risk management assessments missed. While no system is perfect, embracing a culture of continuous improvement can ensure defenses stay as updated as possible.
Cybersecurity risk management crucial for any business
Cybersecurity has become essential as digital technologies and data have become increasingly central to operating your business. Following the risk management steps will give your company effective security strategies. Without this process, you could face long-lasting damage from data breaches.