Before starting on the topic, let us understand what cyber security is. Cyber means virtual and security means protection, so cyber security is the practice of protecting critical systems and sensitive information from attacks carried from digital space i.e. using some form of computing device. Risk on the other hand generally has a negative connotation.
It loosely means threats or danger to some valuable thing. Perception or outlook is the way people like you and me judge the characteristics and severity of a risk. The pace of change in nearly every walk of life has been a phenomenon. At every corner of the world, life is increasingly characterized by rapid technological advances and monumental shifts in the geopolitical landscape and growing sources of social instability. To understand cyber security, there are free cybersecurity courses available.
Cyber attacks are already perceived as the number one global risk that is most likely to intensify in the next decades. Exposure to risks from cyber is growing with the adoption of more and more technology and the reduction of manpower. With the increased number of interconnected devices, there is a much wider playground open to a cyber attack that can cause serious damage both financially and socially. Further, increased use of artificial intelligence in business processes also heightens exposure to cyber-risks.
There is a heightened risk perception of doing activities online especially in developing nations such as India because of increased happenings of cybercrimes. Nowadays, we are faced with safety or security dilemmas every time we go online. But in recent times, service provider’s especially financial institutions, are paying special attention to cyber crimes and thus are investing heavily in strengthening the cyber security department.
Cyber risk is the fastest-growing enterprise risk and organizational priority in today’s globally connected world. Formally, we can define cyber risk, or cyber security risk, as the potential exposure to loss or harm originating from an organization’s information or communications systems. Cyber attacks, or data breaches, are the two most reported and described examples of cyber risk. But needless to say, cyber security risk extends beyond damage and destruction of data or monetary loss and encompasses theft of intellectual property, productivity losses, and reputational harm. No organization is immune to Cyber risk now. It can come from within the organization (internal risk) or from external parties (external risk).
Internal risks usually have their origin from within the organization and result from the actions of employees inside the organization. An act of systems sabotage or data theft that gets carried by an angry employee with malicious intent is an example of malicious, internal cyber risk. Similarly, a forgetful and careless employee who failed to install a security patch on out-of-date software is an example of unintended, internal risk. As far as external risk is concerned, it is primarily sourced strictly outside the organization and its stakeholders. A data breach by a third party or a DOS (denial-of-service attack), or the installation of a virus is all examples of external malicious attack. An unintentional, external attack usually stems from partners or third parties who are outside yet related to the organization – a vendor whose systems outage results in an operational disruption to your organization.
Impact of security incidents are often felt immediately and it varies from real monetary costs, including financial loss due to operational disruptions and regulatory fines, to intangible costs, including the loss of customer trust, reputational loss or a change in leadership. We can analyze security incidents from both qualitative as well as quantitative aspects. Realized costs may include lost revenue due to disruptions to productivity or operations, incident mitigation and remediation expenses, legal fees, or even fines. Less tangible impacts of cyber security incidents are difficult to quantify and generally take longer to rectify. They include loss of goodwill, diminished brand reputation, or a weakened market position.
Cyber security incidents also have a geopolitical flavour and often geopolitical friction contributes to a surge in the scale and method of cyberattacks. Many cyberattacks are conducted as a result of well-resourced efforts with state backing. Large companies particularly that hold large sets of sensitive data must anticipate attacker objectives that can range from simple theft and business interruption to extortion, economic espionage, reputational damage and the infiltration of critical infrastructure and services. The bigger headache is that most cyber adversaries are highly diverse, geographically separated and are very active in cyberspace. It is these points that make cyber a very challenging risk to manage.
All these challenges are forcing companies to ramp up their investment in cyber-risk management. But the fact remains that cyber is still under-resourced in comparison to the potential scale of the threat. We find that cyber-risk management is improving at a slow but sure pace and that businesses and governments need to invest far more in resilience efforts to make handling of cyber threats better than that of handling natural catastrophes. Companies thus need to focus on their resilience to cyber events and change their focus to rebalance their initiatives from prevention to response.
Cyber risk must be mitigated properly as it is fully capable of affecting every aspect of an organization, including its customers, employees, partners, vendors, assets, and reputation. An effective cyber risk management program is the responsibility of the entire organization and not just the IT or Information security department. Cyber risk must be communicated throughout the organization, requiring an integrated approach and cross-divisional collaboration to effectively manage and mitigate exposure.
An organization needs solid groundwork to implement a robust cyber risk management strategy. Firstly, it needs to understand its Risk Profile completely. This could be achieved by doing an enterprise-wide threat assessment that also highlights all potential exposures. Here you need to adopt a holistic approach and consider the entire set of external and internal threats that can range from unintentional user error to third-party access to malicious attacks.
The next step is to identify critical enterprise risks and their targets i.e. the applications, systems, databases, and processes that are subject to cyber risk. You also need to carry out risk assessments with all stakeholders to assess the likelihood and potential impact of cyber risk exposure, including cross-divisional and secondary effects and technology dependencies. To complement the above steps, the organization also has to quantify risks including the potential financial, operational, reputational, and compliance impact of a cyber risk incident. This is usually carried out with the aid of a risk scoring framework that can provide a more holistic ranking of threats.
Secondly, you need to adopt and nurture a company-wide strategy for cyber risk management. To begin with, you can sort risks by employing a shared risk measurement framework and reporting systems to effectively prioritize risks across the organization and enable informed resource allocation. You can improve the categorization by incorporating industry-specific risk standards and adding any specific compliance requirements into your cyber risk management practice. Equally important is setting and communicating the IT and cyber risk management strategy to every member of the organization since security is a collective responsibility
Thirdly, the company must increase its investment in Cyber Risk Management Infrastructure, deeply understand system requirements to identify sources of organizational cyber threats and consequently provide a guidepost to the types of systems required. So, you choose a specific GRC platform as per your company requirements so that the chosen GRC platform can easily accommodate evolving needs.
Finally, the company must establish a Dynamic Cyber Risk Management Process by maintaining an updated inventory of potential threats and dynamic quantification of the potential impact and mitigation costs of cyber incidents. It has to communicate with third parties to ensure its security protocols align with organizational standards and practices. Moreover, the company has to invest in cyber security training. Cyber security is a cutting edge and ever-evolving technology that needs constant course correction with the rapid evolution of technology and related cyber security risks.
The new age mantra is that innovation and growth must go hand in gloves with risk and stability. Top Business leaders must chart a fail-proof course for their companies that have a bold strategic ambition to capture emerging opportunities and rigorous resilience planning that matches up against the complex set of risks in the current global landscape.