Cybersecurity is a significant concern for individuals and organizations alike. With the increasing reliance on technology and the internet, cyber-attacks have become more frequent, sophisticated, and damaging. As a result, managing cyber risk has become a critical aspect of business and personal security. In this blog, we will explore the four tools available for managing cybersecurity risk and the importance of implementing reasonable controls.
As with all risks, there are four tools you can use to manage cybersecurity risk: accept it, control it, transfer it, or avoid it, or some combination of these options. Let’s consider each of these tools in more detail.
Accepting Cyber Risk
Accepting cyber risk means that you acknowledge the potential consequences of a cyber-attack and living with it. This strategy may be appropriate for low-risk scenarios, where the potential damage is minimal, and the cost of preventing the attack exceeds the cost of the potential damage. For example, you may accept the risk of a hacker gaining access to a service that contains no personal or corporate data, but you may not accept the risk of a hacker gaining access to your bank account.
Controlling Cyber Risk
Controlling cyber risk involves implementing measures to reduce the likelihood and/or impact of a cyber-attack. This approach is appropriate for situations where the potential damage is significant, and the cost of prevention is reasonable. For example, you may use strong passwords, two-factor authentication, and encryption to reduce the likelihood of a hacker gaining access to your bank account.
Transferring Cyber Risk
Transferring cyber risk means that you transfer the responsibility for managing the risk to someone else. This may involve purchasing cybersecurity insurance or outsourcing cybersecurity responsibilities to a third party. This approach is appropriate for situations where the potential damage is significant, and the cost of controlling the risk yourself is prohibitive.
Avoiding Cyber Risk
Avoiding cyber risk means that you choose not to engage in activities that carry a significant risk of cyber-attacks. For example, you may choose not to use public Wi-Fi networks or avoid downloading attachments from unknown sources. This approach is appropriate for situations where the potential damage is significant, and the cost of prevention or control is prohibitive.
Let’s work through an example of a major risk – ransomware of a business-critical system. The inherent risk of a ransomware attack is very high, if you do nothing it is likely and it will have a major impact placing it squarely in the avoid quadrant. Now we need to manage this risk.
The first risk management tool we can employe is risk transfer. You can purchase cyber insurance to control the impact of the attack, you take a huge unknowable cost and lower it to a predictable monthly insurance premium. You can subscribe to SaaS tools or outsource IT management to a 3rd party so that it becomes their responsibility to control that risk.
Transfer the Risk
You can use these risk tools in-tandem; you’ve already limited the impact of a ransomware attack by purchasing cyber insurance (x-axis), now you need to reduce the chance of it happening (moving down the y-axis). Employ modern security tools and best practices such as security awareness training, email and web filtering, and MFA to reduce the chance of a successful attack on your organization.
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Control the Risk
Now you have reduced the impact and likelihood of a ransomware attack on a business-critical system. You can never fully eliminate some risks, but because you’ve employed risk management tools – you’ve brought down the managed risk of a ransomware attack to something that you can live with. If you’re breached it won’t be fun, but it won’t be devastating.
Accept the Risk
In conclusion, managing cybersecurity risk is critical to protecting your personal and business assets. By using the four tools available for managing cybersecurity risk, you can determine which approach to take based on the likelihood and potential impact of a cyber-attack, as well as the cost of prevention, control, transfer, or avoidance. Starting with a high risk is common, but implementing reasonable controls can reduce the risk and help protect against cyber threats.
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Learn about today’s threats, how to effectively manage your cyber risk, and 4 steps you can take today to prepare your business from what’s coming next: 2023 State of Cybersecurity | You Will Be Breached