Posted on Sep 8, 2021
Creating a cyber-resilient organization means understanding your security risks and how to mitigate them. However, the cybersecurity risk’s continuously shifting nature makes it challenging for organizations to choose the right risk assessment strategy. By understanding the types of risk assessments and how to use them, you can make better-informed decisions.
Generic risk assessments often fulfill a variety of use cases, but they lack customization. Outside of cybersecurity, an organization might use these for managing contractor workers.
Generic risk assessments usually follow a template. In cybersecurity, you might use one to ask questions that provide visibility into risk. They typically review a broad set of risks across several factors.
For example, they might ask basic security questions like:
Vendor questionnaires are an excellent example of a generic risk assessment. Usually, these questionnaires cover basic security controls, so you can use a template that addresses primary security risks.
However, you might also want to consider vendor criticality and risk before using generic risk assessments. If a vendor is critical to your business processes or interacts with sensitive data, you might want to consider something tailored to the specific use case.
Based on subjective experience, these risk assessments tend to be the most commonly used. Since they lack metrics, you need to keep in mind that people’s backgrounds create bias.
In cybersecurity, qualitative risk assessment is often based on a person’s expertise and background. Usually, a group of stakeholders will share their thoughts and suggest a risk score.
They might discuss the following:
Quantitative risk assessments can be used for internal discussions. They act as an excellent way to get a sense of what different people think about cybersecurity risk, either your own or a potential vendor’s. They are also less time-intensive than other risk assessments. This makes them useful during the early decision-making stages.
Quantitative risk assessments focus on using objective data to determine risk scores.
These risk assessments usually rely on facts and metrics. In general, a quantitative assessment evaluates risk with a formula like:
Risk = Probability of a Data Breach X Financial Impact of a Data Breach
However, while the formula looks simple, the factors that contribute to it are more complex. For example, some considerations include:
In cybersecurity, quantitative risk assessments can be used to assess your organization’s data breach risk and your vendors’ security posture.
Nearly every data security and privacy compliance mandate requires a risk assessment. Since qualitative risk assessments focus on research and objective data, they enable more informed decision-making.
Although every risk assessment comes with some inherent bias, these assessments require data to support the opinions. Organizations that need to meet compliance mandates can use the documentation to make decisions and prove governance over security and privacy programs.
Site-specific risk assessments are usually limited in scope and focused on a specific use case.
In cybersecurity, site-specific risk assessments are less prevalent. They usually focus on a specific project, taking location, environment, and people into account. Since site-specific risk assessments are generally linked to a geographic location, like a branch office, they can be less helpful in cybersecurity. With hyper-connected IT ecosystems, a risk that impacts one area likely has a domino effect across the organization.
However, site-specific risk assessments can offer value when an organization has a subsidiary or an IT asset with unique security issues.
Some examples of when a site-specific risk assessment is helpful in cybersecurity include:
In these cases, the systems and networks pose unique risks to the organization’s security. Doing a site-specific risk assessment makes sense because you need to evaluate the unique impact.
While most risk assessments focus on a moment in time, dynamic risk assessments focus on continuous evaluation and response.
Cybersecurity teams benefit from engaging in dynamic risk assessments. With a dynamic risk assessment, you’re constantly monitoring for emerging risks, evaluating the impact in real-time, and mitigating them as quickly as possible. Dynamic risk assessments should supplement any other risk review processes you have.
Nearly every compliance mandate focuses on continuously monitoring controls’ effectiveness to mitigate data breach risk. While you still need to engage in annual, formal risk assessments, dynamic risk assessments help you respond to evolving threats.
For example, a dynamic risk assessment in cybersecurity should consider new:
SecurityScorecard’s security ratings can enhance your risk assessment processes. Our easy-to-read A-F security ratings monitor IP addresses so that you can gain visibility into branch offices or subsidiaries.
SecurityScorecard’s platform continuously monitors your ecosystem, sends alerts to your security team, prioritizes risk, and suggests remediation actions. Our platform allows you to establish metrics so that you can create quantitative, real-time, dynamic risk assessments to manage your organization’s and supply chain’s security risk.
Vendor management is the process an organization utilizes to assess and manage a third- or fourth-party vendor. Learn how SecurityScorecard can help.
Performing cybersecurity risk assessments is a key part of any organization’s information security management program. Read our guide.
Templates and vendor evaluations are needed to level that playing field, in a time efficient and fair way, so that the best vendors are chosen.
Co-founder and CEO, Alex Yampolskiy, speaks about the importance of measuring and acting on key indicators of cybersecurity risk.
You can’t manage what you can’t measure. Check out our list of the top 20 cybersecurity KPIs to track in 2021.
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