Posted on Jul 19, 2021
Technology is always changing, and as it does, businesses are constantly adopting new technologies to streamline their business processes and improve deliveries of goods and services.
With those new technologies, however, comes risk. Every new technology opens up a business to digital threats. Sometimes those threats come from the untested nature of leading-edge technology, and sometimes those threats are simply associated with the learning curve of users within an organization. Either way, the price tag is steep: according to Ponemon’s latest report, the average cost of a data breach is $3.86 million.
This doesn’t mean that businesses shouldn’t be investing in new technologies, but it does mean organizations should be aware of digital risk and invest in digital risk protection (DRP).
To put it simply, digital risk is any risk that emerges from an organization’s adoption of new digital technologies. Transformation of any kind opens an organization up to news risk, and the nature of new technologies means that digital risks may be difficult to predict.
The unforeseen and unwanted consequences of new technologies are digital risks. There are several types of digital risk:
Cybersecurity risk refers to external risks, such as attacks on your organization’s networks and infrastructure. These risks include hacking, phishing, and other attacks. Some internal attacks also qualify as cybersecurity threats, such as malicious insiders.
Vulnerabilities are weak spots in your network that can allow attackers into your network or accidentally give unauthorized access to data to outsiders. One common vulnerability is misconfigured Amazon Web Services (AWS) buckets. By default, buckets are set to private but sometimes, a mistake is made and sensitive information is exposed to the open Internet.
Regulated industries run the risk of falling out of compliance with the laws and regulations that govern their industries. Adopting new technology can interfere with compliance; sometimes new technology can throw your organization out of compliance with the rules that govern data storage or business operations, for example.
Automating, or changing automated processes, is an attractive option for businesses that are improving workflows and streamlining processes. However, process automation comes along with risk. Sometimes a new process raises compatibility issues, or a workflow doesn’t quite work as it's supposed to.
Attacks, such as ransomware attacks, which lock a company out of its networks, data, and devices, can interrupt business. The risk of not being able to do business for an extended period of time and the financial risk that comes along with it is called resiliency risk, or business continuity risk.
A workforce risk is any staff-related risk that could pose risk to an organization’s goals. If your organization suffers from high turnover, or you can’t find employees with the skills you need, those are workforce risks.
Third-party risk is any risk or threat related to a company’s third parties, such as partners, vendors, or suppliers.
The danger of sensitive data being exposed is a real risk to organizations, particularly the personally identifiable information (PII) of customers or clients, like names, social security numbers, addresses, or financial information.
Digital risk protection (DRP) is the range of measures an organization can take to mitigate risks and control undesired outcomes so that technology can be adopted quickly and as securely as possible.
McKinsey defines DRP as “all digital enablements that improve risk effectiveness and efficiency—especially process automation, decision automation, and digitized monitoring and early warning...Essentially, digital risk implies a concerted adjustment of processes, data, analytics and IT, and the overall organizational setup, including talent and culture.”
Depending on the nature of the risk, DRP can take several forms. For example, cybersecurity risks can be mitigated through monitoring attack surfaces, penetration tests, and educating employees about the dangers of phishing attacks and ransomware.
Third-party risks can be mitigated by monitoring your partners and suppliers and offering them only limited access to parts of your network.
Business continuity risks and process risks can be mitigated with careful planning, such as planning out workflows and creating a response plan should your business be attacked.
Cybercriminals are constantly trying to exploit organizations’ vulnerabilities, so the most important way to mitigate risk is to know your own organization’s digital weaknesses. SecurityScorecard lets you monitor your networks continuously, as well as those of your third parties, giving you an outside-in view of your company’s security and showing you where you need to improve your digital security.
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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