What Is a Risk Assessment for Cybersecurity

by Jake Wengroff
What Is a Risk Assessment for Cybersecurity

With the average cost of a security breach in 2022 standing at $4.25 million, according to IBM, vulnerability can be costly.

And it’s not just unknown, malicious external actors targeting a company’s most precious resources. An assessment is also an opportunity to learn about how employees engage and interact with company assets and resources, to determine where improvements can be made or training is needed. Internal human error — essentially employees who inadvertently enter wrong information or mistakenly grant wrongful access — also present a risk. Verizon’s 2022 Data Breach Investigation Report found that 82% of breaches involve the human element.

As such, in order to prepare for the unknown, companies would benefit from performing a cybersecurity risk assessment. With an assessment in place, companies can have a complete understanding of their assets that are at risk, in addition to existing or potential vulnerabilities and what needs to be done to address them.

Understanding Cyber Risks Faced by Businesses

The Institute of Risk Management defines cyber risk as “any risk of financial loss, disruption or damage to the reputation of an organization from some sort of failure of its information technology systems.” Gartner gives a more general definition: “the potential for an unplanned, negative business outcome involving the failure or misuse of IT.”

Examples of cyber risk include:

  • Theft of sensitive information
  • Damage to hardware and potential lack of access to data
  • Malware, adware, hostageware, and other damaging software and viruses
  • Compromised credentials
  • Failure of the company’s website, mobile apps and other customer-facing digital assets
  • Natural disasters that could damage servers or networks

What Is a Risk Assessment for Cybersecurity?

Cybersecurity risk assessment is the process of identifying and evaluating risks for assets that could be affected by cyberattacks.

By performing an assessment, companies would be able to:

  • Identify both internal and external threats
  • Evaluate their potential impact on data availability, confidentiality and integrity
  • Estimate the damage incurred by a potential cybersecurity incident
  • Cost out the set of tools and strategies to strengthen the security perimeter

A risk assessment is a report card: an evaluation of the current status of risk to the organization’s critical data and assets. However, a cybersecurity risk assessment also serves the purpose of providing recommendations for the future. Identifying current vulnerabilities or threats is important, but without a solid, feasible plan to address potential issues in order to strengthen the organization’s defenses, the risk assessment is of little value.

Cybersecurity Risk Assessment Components

To get started with IT security risk assessment, you need to answer three important questions:

  1. What are your organization’s critical IT assets? (While everything is important, it might be helpful to rank those assets in regard to the level of impact a potential loss or exposure would have on business operations.)
  2. What are the key business processes that utilize, consume or depend on this information?
  3. What potential threats could affect the ability of those business functions to operate?

An assessment involves four key components:

  1. Threat: A threat is any event that could harm an organization’s people or assets. Examples include natural disasters, website failures, disgruntled employees or spying by competitors.
  2. Vulnerability: A vulnerability is any potential weak point that could allow a threat to cause damage. For example, outdated antivirus software is a vulnerability that can allow a malware attack to succeed. Having employees write down passwords on sticky notes affixed to their computer screens could be a vulnerability, as office visitors or even other employees passing by could steal those credentials. The NIST National Vulnerability Database maintains a list of specific, code-based weaknesses.
  3. Impact: Impact is the total damage the organization would incur if a vulnerability were exploited by a threat. For example, a successful ransomware attack could result in not just lost productivity and data recovery expenses but also disclosure of customer data or trade secrets that results in customer defection, reputational damage, legal fees and compliance penalties.
  4. Likelihood: This is the probability that a threat will occur and even how frequently. It is usually not a specific number but a range.

Why Should Your Business Care?

Conducting a thorough risk assessment on a regular basis helps organizations develop a solid foundation for ensuring business and operational success.

In particular, a risk assessment enables companies to:

  • Identify and remediate IT security gaps
  • Prevent the likelihood of data breaches
  • Choose appropriate protocols and controls to mitigate risks
  • Prioritize the protection of the asset with the highest value and highest risk
  • Eliminate unnecessary or obsolete control measures
  • Evaluate potential security partners
  • Establish, maintain and prove compliance with regulatory bodies or the industry
  • Accurately forecast future needs

Why a Cybersecurity Risk Assessment Makes Sense for Your Organization

The Migus Group can help your organization understand, quantify and evaluate the potential cybersecurity risks facing your organization. A risk assessment can vary in size and scope; however, comprehensive and holistic assessments yield the most effective results. The assessment should be repeated as new threats arise and new systems or activities are introduced. Additionally, the assessment provides a repeatable process and template while reducing the chances of a cyberattack adversely affecting business objectives.

Contact The Migus Group today to discuss a risk assessment and your security needs.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, e-commerce and the Internet of Things.