What is Cyber Risk Management?

Cyber risk management is the systematic process of identifying, assessing, mitigating, and monitoring the risks associated with an organization's digital assets, data, and information systems.

The primary objective is to minimize the potential negative impacts of cyber threats on your organization's operations, reputation, and financial stability. Therefore, effective cyber risk management ensures your organization is well-prepared to defend against cyberattacks and respond swiftly if a security incident occurs.

The Cyber Risk Management Process Explained

Cybersecurity risk management involves several key steps:

1. Identification of Assets: Identify and catalog all your physical and digital assets, including hardware, software, data, intellectual property, and current processes to assess potential vulnerabilities for cyber risk.
2. Conduct a Risk Assessment: Evaluate the vulnerabilities and threats that could impact the identified assets through a risk and threat assessment. Use the results of the risk assessments to help prioritize security measures to implement.
3. Risk Mitigation: Once risks are identified, organizations implement security controls, policies, and procedures to reduce the likelihood and impact of cyberattacks.
4. Monitoring and Incident Response: Continuous monitoring of systems and networks helps detect and respond to security incidents promptly, minimizing damage and downtime.

What is a Cybersecurity Risk Assessment?

A cybersecurity risk assessment systematically evaluates an organization's cybersecurity posture. It identifies vulnerabilities, threats, and potential impacts on the organization's digital assets and operations.

Understanding your organization's cybersecurity maturity, knowing where there may be gaps, and addressing those issues is imperative. Taking proactive steps to mitigate cybersecurity risk can mean the difference between a data breach or business as usual.

Four Critical Capabilities for Managing Cyber Risk

Effective cyber risk management relies on four critical capabilities, which help you create a proactive and responsive cybersecurity posture.

Here are the four critical capabilities that any cyber risk management plan must have:

Risk Assessment and Analysis: The ability to identify, assess, and prioritize cybersecurity risks.

• Identify cyber risks: This involves the ability to systematically identify potential cybersecurity risks within your organization. It often starts with a comprehensive asset inventory and threat assessment. Your organization must recognize vulnerabilities that may be exploited by cybercriminals, whether they are technical vulnerabilities, process weaknesses, or human-related risks.
• Assess and quantify your risks: Once potential risks are identified, the next step is to assess and quantify them. This involves evaluating the likelihood of a risk materializing and assessing the potential impact it could have on the organization. Risk assessments are essential for prioritizing risks and deciding where to allocate resources for mitigation efforts.
• Prioritize your risks: Effective risk management requires the capability to prioritize risks based on their severity and potential impact. Not all risks are equal, and organizations must focus their efforts on addressing the most critical ones first. This prioritization enables efficient resource allocation and risk mitigation.

Incident Response Planning: Develop clear procedures for responding to, and mitigating, security incidents.

• Incident Categorization: An essential aspect of incident response planning is categorizing incidents based on their severity and potential impact. This categorization helps determine the appropriate response level and resources required for each type of incident.
• Clear Procedures: Develop well-documented incident response procedures that outline step-by-step actions to be taken when a security incident occurs. These procedures should include roles and responsibilities, communication protocols, and a clear chain of command.
• Testing and Drills: Regularly conduct incident response exercises and drills to ensure that all members of the incident response team are familiar with their roles and procedures. This practice helps improve response effectiveness and efficiency.
• Continuous Improvement: Incident response plans should be living documents that are continually updated to reflect changes in the threat landscape, technology, and organizational structure. After each incident, conduct a post-incident review to identify lessons learned and areas for improvement.

Security Awareness Training: Educate employees on phishing and business email compromises with real-world scenarios and cybersecurity best practices.

• Employee Education: Security awareness training is a critical capability for ensuring that all employees understand their role in cybersecurity. Employees should be educated about common threats such as phishing, social engineering, and password security.
• Security Policy Awareness: Employees must be aware of your organization's cybersecurity policies and procedures. Training should cover topics like data handling, access control, and incident reporting.
• Phishing Simulations: Many organizations incorporate phishing simulation exercises into their training programs. These simulations should mimic real-world phishing attacks to test your employees' ability to recognize phishing and BEC attempts, and report them to your IT/Security department.
• Continuous Training: Cyber threats are constantly evolving, so ongoing training and awareness efforts are essential. Regularly update training materials to address new threats and vulnerabilities.

Continuous Threat Exposure Management: Implement tools and processes for threat detection, investigation, and response against potential threats.

• Real-Time Threat Detection: Enable 24/7 security event monitoring across all your systems and networks to detect suspicious activities, potential security breaches, or anomalies in user behavior.
• Log Analysis: Continuously monitor and analyze system logs, network traffic, and security alerts. Effective log analysis can help identify patterns indicative of security incidents and vulnerabilities.
• Threat Intelligence Integration: Integrate threat intelligence feeds into the monitoring process to stay informed about emerging threats, high-fidelity Indicators of Compromise (IOCs) and attacker tactics, techniques, and procedures (TTPs). This proactive approach allows your organization to adjust their defenses accordingly.
• Response Automation: In some cases, your organization can leverage automation to respond to known threats or routine incidents swiftly, reduce response times, and improve incident handling efficiency.

By identifying and assessing risks, preparing for incidents, educating employees, and continuously monitoring for threats, your organization can minimize exposure to cybersecurity risks and respond effectively when incidents occur.

How To Develop A Cyber Risk Management Plan

A comprehensive cyber risk management plan is crucial for safeguarding your organization's digital assets. Key elements of such a plan include:

Risk Appetite: Define the organization's risk tolerance for cybersecurity

Begin by defining what constitutes a "risk" in your organization's cybersecurity context. This may include unauthorized access to sensitive data, service disruptions, or reputational damage. Next, you should determine what your risk tolerance will be and make sure it aligns with your business objectives:

• Risk Tolerance: Establish clear boundaries regarding how much risk your organization is willing to accept. This often involves weighing potential benefits against potential risks. For example, a financial institution may have a lower risk tolerance due to the sensitive nature of its data.
• Alignment with Objectives: Ensure your risk tolerance aligns with your organization's business objectives. A risk tolerance that is too conservative may impede growth, while one that is too permissive may expose the organization to unnecessary vulnerabilities.

Asset Inventory: Create a comprehensive list of all digital assets

Categorize digital assets based on their importance and value to the organization, which helps you prioritize cybersecurity measures. Assets may include hardware, software, data repositories, intellectual property, and third-party services. The next steps are to map your data flows and assign ownership over each asset:

• Data Mapping: For data-centric organizations, mapping data flows and understanding where sensitive data resides is crucial. This aids in data protection efforts and compliance with data privacy regulations.
• Asset Ownership: Assign responsibility for each asset to specific individuals or teams within the organization. This ensures accountability for asset protection.

Threat Assessment: Identify potential cyber threats and their severity

Stay informed about the evolving threat landscape, which includes understanding common cyber threats like malware, phishing, ransomware, and advanced persistent threats (APTs). You must also have access to security advisories and/or threat intelligence feeds and conduct severity assessments to ensure your cybersecurity strategy is proactive, not reactive.

• Threat Intelligence: Use threat intelligence sources to gather information on emerging threats and vulnerabilities. This allows proactive measures to be taken against new and evolving threats.
• Severity Assessment: Evaluate the potential impact of each identified threat on your organization. Consider financial loss, data exposure, operational disruption, and reputational damage.

Risk Assessment: Evaluate the likelihood and impact of identified threats.

Assess the probability of each identified threat occurring, which can be influenced by factors such as historical data, industry trends, and the effectiveness of existing security controls. Next, consider the impact of the incident to calculate the final risk score.

• Impact Assessment: Determine the potential consequences of a successful cyberattack. Quantify the impact of financial loss, operational downtime, and damage to reputation.
• Risk Scoring: Calculate a risk score for each identified threat by combining likelihood and impact assessments. This helps prioritize risks for mitigation.

Risk Mitigation Strategies: Develop strategies to reduce or eliminate risks.

Identify and implement appropriate security controls to mitigate identified risks. These controls may include firewalls, intrusion detection systems, encryption, access controls, and security awareness training. You should also develop security policies that your employees should uphold to not only prevent security incidents, but can also help you recover from them.

• Security Policies: Develop and enforce security policies and procedures that align with your risk management objectives. Ensure that employees are aware of and adhere to these policies.
• Incident Response: Establish procedures for responding to security incidents. This includes roles and responsibilities, communication plans, and steps for containing, investigating, and recovering from incidents.

Incident Response Plan: Prepare a clear incident response plan for security incidents.

Develop a well-documented incident response plan that covers various types of security incidents, including data breaches, malware infections, and denial of service attacks. Make sure your incident response plan covers incident classification and how you’ll communicate with all stakeholders. You should establish a regular testing and training cadence to make sure your IR plan is effective as your business grows and scales.

• Incident Classification: Define incident severity levels and the appropriate response actions for each level. This helps responders understand the urgency and severity of an incident.
• Communication: Establish clear communication channels and points of contact for reporting and escalating incidents. Ensure that all employees know how to report suspicious activities.
• Testing and Training: Regularly test and update the incident response plan to ensure its effectiveness. Provide training and drills for incident responders to ensure they are prepared to handle real-world incidents.

By incorporating these elements into your cybersecurity risk management plan, you can create a structured and proactive approach to cybersecurity that helps safeguard your organization's digital assets and reduce the impact of potential cyber threats. Remember that cybersecurity is an ongoing process, and regular reviews and updates to your plan are essential to staying resilient in the face of evolving threats.

The Role of Internal Compliance and Audit Teams in Cyber Risk Management

Internal compliance and audit teams play a crucial role in IT risk management by ensuring that an organization's cybersecurity practices align with established standards and policies. Their responsibilities include:

• Risk Assessment: Collaborating with IT/Security teams to identify and evaluate cybersecurity risks.
• Auditing: Regularly assessing the organization's cybersecurity measures for compliance with internal policies and external regulations.
• Compliance Monitoring: Ensuring the organization adheres to relevant cybersecurity regulations, industry standards, and best practices.
• Guidance and Support: Providing recommendations for improving cybersecurity practices based on audit findings.

Standards and Frameworks That Require a Cyber Risk Management Approach

There are several industry standards and frameworks that mandate a structured approach to cyber risk management, such as the NIST Cybersecurity Framework, ISO 27001, and the CIS Controls.

Depending on your organization's industry, size, and specific needs, you may choose to adopt one or a combination of cybersecurity frameworks to strengthen your cybersecurity posture and ensure compliance with industry best practices and regulations.

Incorporating these industry standards and frameworks into your cybersecurity strategy can provide a structured, well-informed approach to managing cyber risk.

NIST Cybersecurity Framework

The National Institute of Standards and Technology Cybersecurity (NIST CSF) Framework is a widely recognized and respected framework designed to enhance cybersecurity practices across various sectors. It was developed in response to an Executive Order signed by the U.S. President in 2013 and is particularly relevant to critical infrastructure organizations.

The NIST Cybersecurity Framework is not only applicable to critical infrastructure sectors but can be adopted by organizations of all sizes and industries to improve the security posture and align security efforts with business objectives.

NIST recently released an updated version of the framework, the NIST CSF 2.0, which introduced a sixth core function to expand guidance around governance. Here's a closer look at its key components:

• The NIST Framework: The core structure of the NIST CSF consists of six functions: Identify, Protect, Detect, Respond, Recover, and Govern. These functions provide a structured approach for organizations to manage and reduce cybersecurity risk.
• Categories and Subcategories: Within each function, there are categories and subcategories that provide specific guidance on implementing cybersecurity controls. Organizations can use these to tailor their cybersecurity efforts to their unique needs.
• Implementation Tiers: NIST's framework offers four implementation tiers (i.e., Partial, Risk-Informed, Repeatable, and Adaptive) that allow organizations to assess and improve their cybersecurity practices incrementally.
• Profiles: Organizations can create profiles to align the framework with their specific cybersecurity objectives, risk tolerance, and business requirements.

ISO 27001

ISO 27001 is an international standard for information security management systems (ISMS). It not only helps organizations protect their data and information assets, but also enhances their credibility and trustworthiness in the eyes of customers, partners, and regulators.

Here's a deeper look at ISO 27001:

• ISMS Implementation: ISO 27001 outlines the requirements for establishing, implementing, maintaining, and continually improving an ISMS within an organization.
• Risk Management: Central to ISO 27001 is the identification and assessment of information security risks. Organizations are required to evaluate the risks associated with their information assets and implement controls to mitigate those risks.
• Continuous Improvement: ISO 27001 emphasizes the importance of ongoing improvement. Organizations must regularly review and update their ISMS to address emerging threats and changes in their operational environment.
• Certification: Organizations can seek ISO 27001 certification, demonstrating their commitment to information security best practices. Certification is often sought by organizations that handle sensitive data, such as financial institutions or healthcare providers.

CIS Controls

The Center for Internet Security (CIS) Controls is a set of best practices that offer a prioritized approach to cybersecurity. Developed by a community of cybersecurity experts, these controls provide actionable recommendations for organizations to strengthen their security posture.

The CIS Controls are particularly valuable for organizations seeking a practical and actionable roadmap for improving their cyber defenses. Here's a closer look at CIS Controls:

• 20 Critical Security Controls: The CIS Controls consist of 20 specific security controls, each designed to address a particular aspect of cybersecurity. They are organized into three groups: Basic, Foundational, and Organizational.
• Implementation Guidance: For each control, the CIS provides detailed implementation guidance, including specific actions organizations can take to meet the control's objectives.
• Risk Focus: The controls are prioritized based on their effectiveness at mitigating common cyber threats. This prioritization helps organizations focus their resources on the most critical security measures.
• Customizable Approach: Organizations can tailor their implementation of the CIS Controls to align with their specific needs and risk profile. This flexibility makes them suitable for a wide range of industries and organizations.

Cybersecurity Risk Management with eSentire

Cyber risk management is an essential aspect of modern business operations, and it requires a structured approach, continuous monitoring, and alignment with industry standards and best practices.

By understanding the key concepts and frameworks associated with cyber risk management, organizations can better protect their digital assets and mitigate the potential impact of cyber threats.

eSentire provides comprehensive cybersecurity risk management solutions to help organizations protect their digital assets effectively. Our approach includes:

• Managed Threat Detection and Response Solution: Combine our open XDR technology, multi‑signal threat intelligence, unlimited threat hunting and incident handling, and complete response to help you build a more resilient security operation today.
• Vulnerability Management Service: Identify vulnerabilities across traditional and dynamic IT assets such as mobile devices, OT, IoT, virtual machines, and cloud providing full visibility and contextual awareness across your attack surface.
• Security Awareness Training Program: Alleviate resource constraints so you can drive behavioral change with your employees and build resilience against the most advanced cyberattacks.
• CISO and Advisory Services: Assess the maturity of your cybersecurity program against industry peers, align cybersecurity strategy with business objectives, and build a roadmap that reduces your cyber risk.

Learn more about how eSentire can enhance your cybersecurity risk management strategy.