Cybersecurity continues to be a growing concern for corporate organizations. This is especially the case for small to medium enterprises (SMEs) because they are the most vulnerable to cyber-attacks. Therefore, SMEs have begun to take various steps and measures to eliminate cyber threats from external attackers. With a risk-based approach to cybersecurity, SMEs identify and eliminate the threats that negatively affect the normal functions of the organizations.
As the world becomes increasingly digitalized, commercial activities are also being done on digital media. With more content going online, the risks of cyber-attacks such as fraudulent emails, ransomware, and malware also increases. Therefore, board members like yourselves are willing to take the various risks, dangers, and expenses related to a proper functioning cybersecurity plan.
The security needs of each organization widely differ from each other. As a result, companies must adopt different strategies based on your organization’s goals and objectives. While most organizations focus on their security needs after a breach or attack on the system, we advise on following a different method which is to prevent and minimize these breaches and attacks.
What is a Risk-Based Approach to Cyber Security?
A risk-based approach to security aims to ensure everyone in the organization is fully capable of detecting, analyzing, controlling, managing, and correcting any kind of cyber attack or threat by an outsider. It continuously evaluates the current system of the organization to see if it can control and detect cyber attacks.
The risk-based approach allows companies to analyze and classify the security data in their network. With the information found, they can prioritize and sort their resources more efficiently for their security network.
Why Do Organizations Need It?
Adopting a risk-based approach to cybersecurity ensures your organization a complete, long-term, and reliable safety plan from potential threats. A risk-based approach allows you to observe the gaps and deficiencies in your organization network. This has a greater advantage compared to a compliance-based approach because it considers all perspectives in your security network. A compliance-based approach limits your organization because it primarily focuses on meeting the minimum requirements your company must meet.
While compliance guidelines help with listing out the best practices of risk management, these guidelines are not customized to each corporation. As such, they are more general and will not provide the most optimal protection for your organization’s security network. Therefore, companies should adopt a risk-based approach to cybersecurity to ensure their companies’ data and information are sufficiently protected. This helps prevent financial loss and other negative impacts to the organization.
Furthermore, when compared to a maturity-based approach, the risk-based approach is more efficient in using resources and data. In the maturity-based approach, companies maximize the protection level of each sector in their network. As a result, companies end up using more money and resources than necessary.
Meanwhile, with a risk-based approach, companies identify and prioritize where they need to improve upon in their organization to better protect the company’s private information. By identifying and prioritizing specific parts in the network, organizations save millions of dollars per year. As noted in the figure provided by McKinsey & Company, a maturity-based approach has a total cost of €14 million (approximately $16.4 million USD), while a risk-based approach has a significantly lower cost of €5 million (approximately $5.9 million USD).
How do You Adopt a Risk-Based Approach to Cybersecurity?
1. Identify and Measure Potential Risks
To adopt a risk-based approach, you must identify potential risks in your business. A risk is an intersection between an existing organizational weakness or shortcoming and the potential threat to the organization from the outside or inside. Organizations that adopt this approach divert their attention to find the possible risks that they may face the rank or score them. This measuring scale of your organization’s vulnerabilities is determined by:
- How likely the risk will occur.
- How much damage the risk will cause both financially and materially.
Implementing a measuring system for your potential risks helps you identify and prioritize which vulnerabilities has a higher risk or impact on your organization. Doing this helps the organization focus on the specific risks and improve the organization’s security more efficiently.
While identifying and measuring your organization’s potential risk, you must understand that not all risks can be mitigated and avoided. Therefore, the organization must classify the risks to determine which ones will have the most negative consequences to your organization. Aim to mitigate the risks that lie between the two extremes of:
- Being unavoidable.
- Being too costly or time-consuming to mitigate.
By working on the risks that lie between these two extremes, you can bring your organization’s security to an acceptable level for your organization to handle.
2. Involve all Business Stakeholders in the Assessment Process
Next, you must involve all stakeholders of the business in the assessment process. Cybersecurity does not solely rely on the IT team, but rather, the entire organization. Everyone from the janitor to the CEO hold the responsibility of keeping the organization safe from cyber threats. Therefore, do not place all responsibility of cybersecurity on the IT team.
Involve all business stakeholders in the assessment process to help them familiarize how cyber attacks occur and why they are harmful for the organization. By bringing in the business stakeholders, you will establish a culture of security in your organization where everyone is responsible and held accountable for the organization’s security.
Cyber risks that threaten your organization includes both IT risks and operational risks. Therefore, once again, all stakeholders must participate in the assessment and decision-making process because IT members along might not have the necessary expertise to make the best decision for the company’s security. Your cybersecurity team should include leaders and employees from various departments such as finance, IT, public relations/marketing, operations, etc.
3. Monitor Your Organization’s Security and Governance
To ensure your company will remain safe from cyber attacks, you must continue to monitor your organization’s security and governance. Cybersecurity is not a one-time event for your company to complete. Cyber hackers’ skills are constantly evolving, so your organization must improve your security as well. To do this, you must constantly assess and monitor your network to identify any cyber threats. Doing constant check-ups and updates to your system is cheaper than dealing with the aftermath of a cyber attack.
In the Cost of a Data Breach Report 2021 by the Ponemon Institute and IBM Security, it was found that there was a difference of $3.81 million (approximately 80%) in data breach cost between organizations who fully deployed security AI and automation vs organizations without security AI and automation. Therefore, implementing security AI and automation to monitor your organization’s security and governance will help you improve your cyber security while helping maintain your budget.
A risk-based approach to cybersecurity is the most authentic and effective security approach that has been adopted by the most successful organizations in the world. It aligns with long-term strategic goals and helps protect the organization from threats in the long run. With this approach, everyone in the corporation facilitates one another to help the organization function successfully and smoothly.
Furthermore, this approach is not short-lived like other approaches because it is flexible and easy to adapt based on changes made within the organization. By following a risk-based approach, you can clearly evaluate the state of your company’s network security, and with that information, you can better protect your organization from cyber breaches and attacks.
- Boehm, J., Curcio, N., Merrath, P., Shenton, L., & Stähle, T. (2019, October). The risk-based approach to cybersecurity. McKinsey & Company. https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Risk/Our%20Insights/The%20risk%20based%20approach%20to%20cybersecurity/The-risk-based-approach-to-cybersecurity.pdf
- IBM Security & Ponemon Institute. (2021, July). Cost of a Data Breach Report 2021. IBM Corporation. https://www.ibm.com/security/data-breach
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