Rapid technological advancement and rising global connectivity are reshaping the way the world is functioning. From higher productivity to improved customer satisfaction, technology has played a critical role in businesses’ growth across the planet. However, the consequential lousy news is that technological advancements have also made organizations increasingly vulnerable to digital risks. However, this does not mean that businesses must compromise on growth and advancement for the sake of security.
The security challenge within these digital environments can be better addressed if organizations knew how to identify these risks and incorporate preventative security measures and controls, along with proactive solutions and detailed plans, to overcome their digital vulnerabilities. Let us discuss the different types of digital risks you should be looking out for and how you can use this information to get a positive ROI.
Types of Digital Risks
Digital risks are increasing in the business world due to the rapid adoption of new disruptive technologies. These risks are seen in various industries and are more pervasive than cybersecurity risks. On a broader scale, digital risks can be classified into physical, technical, and administrative risks.
The following risks are the most prevalent in today’s digital world and should be treated as top priorities for your business:
- Cybersecurity risk: Cyberattacks continue to evolve as businesses become more technology-driven. Attacks like ransomware, DDoS, Etc., can bring a halt to any business’s normalcy.
- Data privacy risk: As we move forward to a knowledge-based economy, data has become the most valuable commodity in the world. This has resulted in hackers targeting critical business data and misusing them for personal gains.
- Compliance risk: Businesses need to adhere to various regulations regarding data privacy, cybersecurity, organizational standards of practice, Etc. Any violation can attract hefty fines and penalties for a business.
- Third-party risk: When you outsource certain services to third parties, it might compromise the security of your IT infrastructure. For instance, a software tool you develop with an external vendor may introduce some vulnerabilities to your otherwise intact digital environment.
- Resiliency risk: This concerns a business’s ability to bounce back and continue operations after an unexpected disaster.
- Risks due to human errors: In the UK, 90 percent of cyber data breaches were caused by human errors in 2019. Whether it’s falling for phishing scams or misusing work devices, human mistakes can be quite costly for organizations if they go unchecked.
- Automation risks: While automation is reshaping the tech industry for the better, it could also give rise to a range of threats such as compatibility risks, governance risks, Etc.
- Cloud storage risks: The flexibility, ease-of-use, and affordability offered by the cloud make it one of the most popular backup and storage options. However, the cloud is also prone to various risks such as lack of control over data, data leakage, data privacy, shared servers, Etc.
Importance of Risk Assessment in Managing Digital Risks
The best way to start managing your digital risks is by performing comprehensive security risk assessments regularly. After all, how would you know your current vulnerabilities or gaps and where your biggest security challenges lie without an ‘under the skin’ examination? With a risk assessment, you can measure your security posture against various internal and digital threats and determine how equipped you are to deal with these risks. When you perform a security risk assessment, you can proactively:
- Identify vulnerabilities: A risk assessment helps you identify which part of your digital environment is relatively weak against various security threats. You can identify which systems are likely to be targeted by attackers and incorporate measures to strengthen these systems. Without the information presented by your risk assessment report, you don’t stand much chance of improving your digital security posture against various vulnerabilities.
- Review and bolster security controls: In most cases, security incidents occur due to a lack of controls in the process. For instance, without proper cybersecurity awareness training and best practices training, employees are unlikely to follow security protocols on their own, resulting in losses due to human errors. Based on the risk assessment, you can upgrade your securities and incorporate preventive measures against various risks.
- Track and quantify risks: To effectively manage various risks, you need to know its effect on your business. With a risk assessment, you can quantify these risks by identifying the potential losses posed by various threats. This helps you incorporate necessary risk mitigation strategies to prevent your exposure to multiple risks.
The Value of Risk Assessment
IT and security budgets are often challenging to explain to management. Everyone understands the consequences of not investing incorrect security measures. However, it isn’t that easy or straightforward to put an exact ROI figure on security investments. The value of risk assessment is based on how you choose to act with the information you get from these reports.
In this scenario, the real question is – what is the cost of not making this investment? Let us consider a significant data breach, for example. It is always about what you stand to lose in the aftermath of a breach. If your business is dealing with valuable customer data, a data breach can result in unrecoverable financial losses as well as reputational damage. Moreover, this might also result in regulatory non-compliance and attract heavy penalties from various regulators. In such cases, reviving a business after a major disaster can be almost impossible.
Here, the cost of investment in security solutions and cyber insurance is negligible since it concerns the business’s survival. You may not measure the exact ROI of the airbags in your car, but that does not mean that your survival is not dependent on them. Similarly, the information and insights gained from routine risk analyses are critical to your business’s operation, resilience posture, and long-term success.
Assess Your Risks the Right Way
Monitoring and managing your digital security risks is a continuous process that must be done regularly and should be a part of your ongoing operational strategy. To implement it the right way, you need to create a risk monitoring strategy that focuses on what risks need to be identified and how to identify them.
Reach out to us today to perform a complete risk assessment of your digital infrastructure and help you build a resilient security posture against various threats.
Article curated and used by permission.
- https://www.cybersecurityintelligence.com/blog/90-of-breaches-are-caused-by-human-error-4820.html: 90% of breaches are caused by human error