Risk Management

Businesses face risk all the time – and that’s OK. Even though the word “risk” typically has negative connotations, the term can actually represent many situations, not all of them unfavorable.

ISO 31000 states that risk is the “effect of uncertainty on objectives.” That actually means risk can come in two types: positive and negative.

What Is Positive Risk and Negative Risk?

Positive risks are events that are beyond a company’s control but can work in the company’s favor, allowing the business to capitalize and benefit from them.

In contrast, negative risks are potential events that could harm an organization. With these risks, the focus is on mitigating, preventing, or minimizing the extent of the negative outcomes or damage they may cause.

Can There Really Be Positive Risks?

Yes, there can be positive risks in business. Just like negative risks, positive risks are uncertain and may or may not occur – but when they do happen, they can boost your organization’s ability to achieve critical business goals. We can also call positive risks “opportunities.”

Positive risks can increase profitability, establish a strong market position, and enhance competitive advantage. Unlike negative risks (which hinder progress), positive risks support organizational teams and encourage improvements in how your employees work towards achieving business goals. Think of positive risks as motivators for executives to focus on profit goals, and also on helping employees to achieve professional aspirations.

The importance of positive risks lies in their ability to help companies reduce production and operational expenses, make better investments, and effectively allocate resources toward business growth. Embracing positive risks is crucial for fostering innovation; it allows companies to develop fresh approaches to overcome industry challenges. When you take on positive challenges, you can position your organization advantageously in the market, gaining a competitive edge.

Examples of Positive Risks in ERM

The idea of positive risks can sometimes be hard to grasp. Here are several practical examples.

Positive risk in project management

One responsibility of a project manager is to create and monitor the project budget, based on the estimated resources needed to achieve the project objectives. Sometimes a miscalculation in the planning phase results in too much money budgeted for the project, which can then be reduced.

Effective project risk management positively affects the organization, especially considering it’s much easier to redistribute unused resources than to cut other projects to cover overspending.

Positive risk in assets & investments

Many of the assets within a company have an estimated service life, which determines the worth of an object or property based on that asset’s ability to provide value over time.

When the actual useful life exceeds the estimated useful life (say, a technology company extending the useful life of its computers from three years to four), that is a positive development. The original assessment was wrong, but the result was beneficial for the organization since it can use the asset for a longer period without investing in a replacement.

Positive risk in technology

When deploying certain technologies to facilitate tasks within the company, the organization must consider the risks. Executives must balance the potential reward (greater efficiency) against the potential risks (higher security risks, for example).

That said, sometimes technology is upgraded in ways that enhance the original efficiency estimate or reduce the original risks. These changes can directly benefit companies that can now take advantage of these new capabilities to increase productivity.

Positive risk in development

Say your company introduces a new product. There is a risk that the product may not achieve the expected performance; for any number of reasons, the market may not like what you have to offer.

Alternatively, the product’s success may exceed your expectations. This could result in problems with the organization’s ability to meet greater demand for the product, but that is generally a good problem to have – certainly much better than the alternative of killing a new product for lack of demand.

Positive risk in supply chain management

Managing the supply chain comes with its fair share of risks, but sometimes these risks can work in your favor.

For example, say you switch to a new supplier offering lower prices. That switch involves some positive risks, like figuring out shipping fees, meeting delivery deadlines, and negotiating the terms of the new contract. It’s all about building trust and creating a solid relationship with this new supplier.

Examples of Negative Risks

Negative risks are much more visible in a company’s daily operations. Also called “threats,” negative risks should be considered alongside positive risks.

Negative risk in project management

Overspending is a common threat in project management. It can result from an inadequate estimate of project costs, and jeopardize your project’s objectives.

Lack of an action plan to deal with budget overspending is a negative risk for the company. Shifting the allocation of resources to complete a project is always a messy endeavor; meanwhile, project interruptions or delays can be far more costly than the original budget overrun.

Negative risk in assets & investments

When a particular tool, asset, or infrastructure fails earlier than expected, that can result in a partial or total production stoppage. Production stoppages harm employee efficiency, customer satisfaction, and profitability, among other damage to the organization.

Negative risk in technology

A wide variety of negative risks in the technology sector can interfere with achieving the company’s objectives. Many of these are invisible until they occur and cause all sorts of damage.

In the same way that there are updates that protect users of particular software, these updates can also create vulnerabilities if the updates go unnoticed by developers (with the potential for serious harm if cyber attackers discover those vulnerabilities).

Negative risk in development

It’s always possible that a new product or service will fail. Therefore, regardless of the proposal or the investment in market research, it’s wise to have risk response strategies in case of the project’s failure.

Negative risk in supply chain

Negative risk in the supply chain refers to potential events or circumstances that can adversely affect a company’s supply chain operations, performance, or objectives. These risks have the potential to disrupt the smooth flow of materials, products, and information throughout the supply chain, leading to various negative consequences.

Managing Positive and Negative Risks

Despite their starkly different consequences, positive and negative risks are two sides of the same coin. It may seem counterintuitive to assess and monitor positive risks since they only help the organization. Still, such risks provide a unique approach to risk analysis and the organization’s risk exposure.

When a positive risk materializes (as in the case of underspending or the underassessment of an asset’s lifespan) it indirectly represents a failure in your risk management processes – which either failed to identify a human error or were not sufficiently accurate in their assessments.

Another issue is that positive and negative risks have opposing risk management strategies. That is, while a company avoids negative risks by delegating tasks or rejecting certain agreements with third parties, it exploits positive risks by taking actions to increase the chances of those uncertain events. Both strategies need to be included in your risk management plan.

While positive risks are shared to reap benefits across the enterprise as much as possible, negative risks are transferred to others better suited to respond or mitigate the harm.

When a positive event occurs, the goal is to leverage its effects and take advantage of them to benefit the organization. In contrast, in a negative event, there are strategies to mitigate the harm. In both cases, the risks that cannot be influenced or modified are accepted, from which an organization can learn for future occasions.

Managing Risks with ZenGRC

Assessing your risks, installing proper controls for managing risk, and collecting documentation at each stage may be intimidating and time-consuming if you try to do it all yourself and manage the requirements on a spreadsheet.

ZenGRC helps you comply with a wide range of frameworks, including GDPR, CCPA, HIPAA, and others, through identifying vulnerabilities, assessing policies and processes, and ensuring tracking and other measures operate correctly.

ZenGRC is a governance, risk management, and compliance solution that can help you streamline and optimize compliance activities by automating many of these time-consuming, manual processes. Schedule a free demo today and see how ZenGRC can help you manage your risk more easily and efficiently.

Cybersecurity is one of the top concerns for organizations. In recent years, and that’s not going to change any time soon – unless, if anything, cybersecurity becomes the top concern.

So what can an organization do about the rise in cybersecurity incidents?

In this article we’ll take a closer look at security incidents: what they are, the most common types, and how to prevent and mitigate them. Armed with this information, your organization will be able to protect itself against future security incidents and to get started on the path toward worry-free cyber risk management.

What Is a Security Incident?

A security incident is any event related to compromised data resulting from missing or failed security measures. Specifically in cybersecurity, an information security incident involves the unauthorized access, use, disclosure, breach, modification, or destruction of data.

Typically an event is categorized as a “security incident” when it is widespread enough to disrupt your normal business operations. That’s not the same as a “security event,” which is a single incident that usually doesn’t disrupt your organization. A security incident is a more serious problem – and it doesn’t necessarily need to be a successful attack to necessitate a response from your organization.

A cybersecurity security incident could be anything from a potential threat to a successful attack; just because your information wasn’t compromised doesn’t mean you should ignore the incident altogether. Any security incident occurs, successful or not, should result in a review of the tools, policies, and procedures you have in place to prevent similar events from happening again.

In many cases, the result of a cybersecurity incident is a breach of personal data. Such incidents can inflict huge financial and reputational harm on the victim. In 2021 the average cost of a data breach was $4.24 million, a figure which is likely to grow considerably in the coming years. Businesses also face additional costs for regulatory fines, fees, and even legal action in extreme cases.

Most Common Types of Threats to Information Security

Below are the most common types of information security threats your security team should know about:

• Insider threats
• Viruses
• Computer worms and Trojans
• Botnets
• Phishing attacks
• Ransomware attacks
• Exploit kits
• Malvertising
• Advanced persistent threats (APTs)
• Distributed denial-of-service attacks

As you can see, information security or infosec threats range from advanced persistent threats to different types of malware, each with the capacity to bring down your organization unless it has an effective cybersecurity strategy.

What Are the Most Common Types of Security Incidents?

Using technology to their advantage, cybercriminals will do everything and anything possible for financial gain. Here are some of the most common types of security incidents executed by malicious actors against businesses and organizations:

Unauthorized Access Attacks

This type of incident involves any unauthorized attempts by a threat actor to access systems or data using an authorized user’s account. How a cybercriminal gains access to user accounts often remains a mystery, even long after an attack. Still, your organization can do few things to prevent this type of security incident from occurring.

If you don’t already do so, require multi-factor authentication (MFA) for all users. This will require users to provide additional identifying information (say, a one-time verification code sent to their phone) after they enter a correct username and password. Many times, multi-factor authentication alone can deter a potential security incident from occurring, since criminals will simply move on to another target that doesn’t use MFA.

Also, consider encrypting your sensitive corporate data at rest and in transit using suitable software or hardware technology. This way, attackers won’t be able to access confidential data such as your account or credit card details even if an attack succeeds.

Privilege Escalation Attacks

This type of incident occurs when an attacker attempts to gain unauthorized access to an organization’s network, and then tries to obtain more privileges using a privilege escalation exploit. A successful privilege escalation exploit grants threat actors privileges that normal users don’t have. Usually, this type of attack takes place only after a hacker has already compromised an organization’s endpoint network security by gaining unauthorized access to a lower-level user account. With privileged access to your most sensitive information, there’s no telling what a cybercriminal might do.

To prevent this type of security incident, start by looking for and remediating any security vulnerabilities in your IT environment. Ideally your organization should do this by conducting regular vulnerability assessments and scans as part of your overall risk management program.

Another tactic is to use the “principle of least privilege” to limit the access rights for users to the bare minimum permissions they need to do their jobs. Also consider security monitoring tools to help you collect and analyze potential security threats, so you can respond appropriately.

Insider Threat Attacks

Insider threats are malicious (intentional) or accidental (unintentional) threats caused by employees, former employees, or third parties, including contractors, temporary workers, or customers.

While preventing insider threats can be difficult, you can take some steps to reduce the chance of an incident. First and foremost, you should implement spyware scanning programs, antivirus programs, firewalls, and a rigorous data backup and archiving routine.

You should also train your employees (and any contractors) on security awareness before allowing them access to your computer networks. A robust security awareness training program should also include routine training sessions to avoid any unintentional security incidents resulting from user error.

You can also implement employee monitoring software to reduce your risk of a data breach or intellectual property theft by identifying careless, disgruntled, or malicious insiders. Additionally, an internal whistleblower program (that protects employees who come forward) can help your organization to gain intel about potential security incidents.

A data loss prevention policy will also let insiders know what’s expected of them when handling company data and that they’re being monitored for unwanted behaviors. Sometimes this alone is enough to prevent internal actors from acting carelessly or maliciously.

Phishing Attacks

In this type of social engineering attack, the attacker assumes the identity of a reputable entity or person via email to distribute malicious code or links that can perform various functions, such as obtaining login credentials or account information from victims. More targeted phishing attacks are known as spear phishing attacks, where the attacker invests more time researching the victim to pull off an even more sophisticated attack to steal information.

On a technical level, a gateway email filter will help you trap a large number of mass-targeted phishing emails and reduce the overall number of emails that reach your users’ inboxes. You probably still won’t be able to prevent every single phishing attempt from entering every single inbox, so you’ll need to take other steps as well.

Start by educating your users so that they’re better able to identify phishing attempts on their own. In some organizations, incentive programs encourage employees to identify and report phishing emails in exchange for a reward. These types of programs have prevented phishing attacks from leading to more serious types of security incidents, like malware attacks.

Malware Attacks

Malware is a broad term for various malicious software, including Trojans, worms, ransomware, adware, spyware, and other types of viruses. Malware can either be inadvertently installed when a user clicks on an advertisement, visits an infected website, or installs freeware or other infected software; or, it can be installed intentionally by insider threat actors or malicious actors with unauthorized access.

The signs of a malware attack include unusual system activity, sudden loss of disk space, unusually slow speeds, repeated crashes or freezes, increased unwanted internet activity, and pop-up advertisements.

To protect your organization against this type of security incident, you should install an antivirus tool to detect and remove any malware. Whether you decide on real-time protection or routine system scans to detect and remove malware, whichever security solution you choose should protect your organization against any existing malware and any future malware attacks.

Distributed Denial-of-Service or DDoS Attacks

This type of security incident occurs when a threat actor floods the target system with traffic or sends information that triggers an attack to shut down an individual machine (or an entire network) so that it cannot respond to service requests. Typically, these attacks can be dealt with by simply rebooting the system.

You can also reconfigure your firewalls, routers, and servers to block any future unwanted traffic. Keep your firewalls updated with the latest security patches as part of your overall patch management program to keep your systems, software, and applications at their most secure. If you choose, you can also integrate front-end hardware into your network to help analyze and screen data packets to classify them as they enter the system.

Man-in-the-Middle (MitM) Attacks

This type of incident occurs when an attacker secretly intercepts and alters messages between two parties who believe they are communicating directly with each other. In a man-in-the-middle attack, the attacker manipulates both victims to gain access to their data. This can occur via session hijacking, email hijacking, and Wi-Fi eavesdropping.

Although this type of attack is difficult to detect, there are some ways to prevent it. You should first consider implementing an encryption protocol that provides authentication, privacy, and data integrity between communicating computer applications, such as Transport Layer Security (TLS). Or a network protocol that gives users, particularly systems administrators, a secure way to access a computer over an unsecured network such as a Secure Shell Protocol (SSH).

You should also educate your employees on the dangers of using open public Wi-Fi networks, because it’s much easier for hackers to commit cybercrime by exploiting these connections. For the most network protection, use a virtual private network (VPN) to help ensure more secure connections.

Password Attacks

A password attack is expressly aimed at obtaining a user’s password or an account’s password. To do so, hackers use various methods, such as password-cracking programs, dictionary attacks, password sniffers, or simply guessing passwords via brute force trial and error.

A password cracker is an application or program used to determine an unknown or forgotten password to a user account. When in the hands of a hacker, a password cracker can be used to gain unauthorized access to company resources.

A dictionary attack is breaking into a password-protected computer system or server by systematically entering every word in the dictionary as a password until the attacker guesses correctly. While this method might not be the most efficient, if a hacker does guess a correct password, he or she may then try to log in to multiple accounts using the same hacked password.

A brute force attack is when a hacker or bot attempts to log in using a series of generated passwords over and over again until the attacker succeeds. This type of trial-and-error attack can also cause websites to crash, which is another reason why multi-factor authentication is so important.

These types of security incidents can be difficult to prevent completely, but you can take some steps to defend yourself against them in the future. As mentioned above, multi-factor authentication is the best way to prevent unauthorized logins. Even if a cybercriminal guesses the correct password, that alone won’t be enough information to let them into your system.

You should also insist that your employees use strong passwords that include at least seven characters as well as a mix of upper and lower case letters, numbers, and symbols. Users should also change their passwords regularly and avoid duplicating passwords for multiple accounts. Any passwords your organization stores should be done so in secured repositories and should also be encrypted.

Web Application Attacks

This type of incident occurs when a web application is used as the vector for an attack. Web application attacks include exploits of code-level vulnerabilities in the application and attacks that thwart authentication mechanisms.

For example, a cross-site scripting attack is a type of web application attack that occurs when an attacker injects data (such as a malicious script) into content from otherwise trusted websites.

To avoid this attack, your organization should review code early in the development phase to detect any vulnerabilities automatically, by using static and dynamic code scanners. You should also implement bot detection functionality to prevent bots from accessing your application data. Finally, a web application firewall will help you monitor your network and block potential attacks.

Another type of web application attack is an advanced persistent threat (APT), a prolonged and targeted cyberattack typically executed by cybercriminals or nation-states to gain access to a network and remain undetected for a period of time. Ultimately, this type of security incident aims to monitor the target’s network activity and steal data rather than cause damage to the network or organization.

To avoid this type of attack, your organization should monitor incoming and outgoing traffic to prevent hackers from installing backdoors and extracting sensitive data. Again, web application firewalls at the edge of your network perimeter will help to filter any traffic coming into your web application servers. A firewall can also help filter out application layer attacks, such as SQL injection attacks which are often used during the APT infiltration phase.

How to Prevent and Mitigate Security Incidents

For each of the common security incidents described above, we included several steps you can take to prevent, or at least reduce the chances of, an incident occurring. To make things easier, we’ve compiled those suggestions into a singular and actionable list so that you can start preventing and mitigating security incidents for your organization.

Security Incident Detection

The first step to preventing security incidents is to put the right tools and processes in place to detect security incidents before they occur. Security incident detection is important for detecting and responding to incidents before they do damage but also so that you can track and trace the origins of the security incident and put the appropriate security controls in place to prevent it from happening again. Make sure all operating systems are up to date.

The first step to preventing security incidents is to put the right tools and processes in place to detect security incidents before they occur. Security incident detection is important for detecting and responding to incidents before they do damage but also so that you can track and trace the origins of the security incident and put the appropriate security controls in place to prevent it from happening again. Make sure all operating systems are up to date.

Monitor User Account Behavior

Implement behavior analytics tools to monitor user account behavior. Before looking for any anomalous behavior, you need to set the baseline for what “normal” behavior looks like. Once you’ve established that pattern, you can start looking for departures from it, especially for privileged users. Any unusual behavior could be an indication that a security incident is taking place.

You should also monitor for unauthorized users attempting to access servers and data, or requesting access to data that isn’t critical to their job function. This type of behavior indicates two scenarios: an insider attempting to gain unauthorized access to confidential information for malicious purposes, or a malicious actor has already gained access to a user account and is using that account to attempt to gain access to more privileged data.

As a general rule, you should always use the principle of least privilege regarding your data. This means only granting access to data to those employees who need access to perform their duties. To implement this principle, however, you’ll need to start by categorizing your data by sensitivity, so that you know which data your employees should have the least access to. You’ll also need clearly defined roles for the users in your organization, so you’ll know which data different types of users need.

Monitor Network Traffic

Your organization’s network is the gateway into your systems, and data. Keeping it secure is the best way to prevent attackers from gaining unauthorized access to your organization’s sensitive information. It’s important to monitor the traffic coming into your network, and the traffic leaving your network perimeter.

This traffic might include insiders uploading large files to personal cloud applications, or sending large numbers of email messages containing attachments to addresses outside the company, or downloading large files to external storage devices such as USBs. You should also monitor for any traffic sent to or from unknown locations-especially if your company only operates in one country.

In general, your administrators should investigate any unknown or suspicious network traffic to ensure its legitimacy. Even if nothing malicious is occurring, it’s better to be safe than sorry.

Monitor Suspicious Activity

Beyond monitoring user account behavior and network traffic, you should also monitor other types of activity. For example:

• Excessive consumption or an increase in performance of server memory or harddrives could mean an attacker is accessing them.
• Changes in configuration that haven’t been approved, such as reconfiguration of services, installation of startup programs or firewall changes are often a sign of possible malicious activity.
• Hidden files that might be considered suspicious due to file names, sizes, or locations and could indicate a data leak.
• Unexpected changes such as user account lockouts, password changes or sudden changes in group memberships.
• Abnormal browsing behavior like unexpected redirects, changes in browser configuration, or repeated pop-ups.
• Suspicious registry entries, which are usually a result of a malware infection.
  
  

Security Incident Management

As you continuously monitor for threats, your organization will inevitably need to evaluate the risk an attack could pose as well as the vulnerabilities an attacker might exploit to do so. If you haven’t already done so, now is the time to implement a risk management program designed to help your organization identify, analyze, prioritize, and mitigate cyber risks.

Cyber Risk Management

The cyber risk management process never ends. Once you begin, you’ll need to keep the program alive and well if you want it to benefit your organization.

Start by creating a list of your company assets and keeping it current; it’s impossible to know how to protect your assets if you aren’t exactly sure what those assets are. Then conduct a risk assessment to determine the level of risk each of those assets presents to your organization. Next, prioritize those risks and create a mitigation plan for each one you identify. Finally, after mitigating your existing cyber risks, it’s time to start the process again.

In general, your organization should regularly conduct vulnerability assessments to identify vulnerabilities in your systems, software, and applications throughout the risk management process. In addition, you should also regularly conduct risk assessments to determine whether your internal security controls are working effectively to prevent threats from doing damage.

See our five-step risk management article for more details.

Incident Response, Disaster Recovery, and Business Continuity Plans

Ultimately, security incidents are inevitable; you cannot mitigate every single cyber risk. You can, however, decide how your organization will respond to those risks if they can’t be prevented. As part of your risk management program, your organization should create a thorough incident response plan to assure that the correct course of action is taken in the event of a security incident.

This includes making sure that the right people know what to do when a security incident occurs, and that you have the right plans to cover your assets in a number of disruptive events, including cybersecurity incidents, natural disasters, and more. A disaster recovery plan will help your organization ensure business continuity in the face of one of these disruptions.

Tools to Help

Protecting your organization from security incidents can be an overwhelming task, especially if you’re attempting to do so on your own. Moreover, with an endless number of security software solutions, tools, and applications to choose from, picking the right ones can be overwhelming too. You want a tool to do all-threat monitoring, risk management, governance, and compliance.

Fortunately, there are solutions designed to help.

Prevent Security Incidents with ZenGRC

ZenGRC is an integrated cybersecurity risk management solution designed to provide you with actionable insights to gain the visibility you need to stay ahead of the different types of cybersecurity threats and communicate the effect of risk on high-priority business initiatives.

Turn the unknown into quantifiable and actionable risk insights with built-in expertise that identifies and maps risks, threats, and controls for you, so you can spend less time setting up the application and more time using it.

A single, real-time view of risk and business context allows you to communicate to the board and key stakeholders in a way that’s framed around their priorities, keeping your risk posture in sync with the direction your business is moving.

ZenGRC will notify you automatically of any changes or required actions, so you can be on top of your risk posture like never before. Eliminate time-consuming, manual work and streamline collaboration by automating workflows and integrating with your most critical systems.

Now, through a more active approach, you can give time back to your team with ZenGRC. Talk to an expert today to learn more about how ZenGRC can help your organization mitigate cybersecurity risk and stay ahead of threats.

Risk management is the process of identifying, monitoring, and managing risks and their harm to a business. These risks can range from data loss, cyberattacks, and security breaches, to system failures and even natural disasters.

Given the potential harm these risks can inflict on a business, security and cybersecurity teams must create and implement risk management programs to identify these threats and then implement appropriate steps to prevent them from happening.

What Is the Risk Management Process?

The foundation of a risk management program is the risk management framework – a blueprint that guides you through certain best practices to build an effective program. For example, a company looking to manage risks around personal health information (PHI) in its possession might implement the HITECH framework; a company with payment card data might follow the PCI DSS framework. Numerous frameworks exist to help manage a wide range of risks.

When designing a risk management program, you must consider at least five essential elements. They are risk governance, risk reporting and monitoring, risk reporting and assessment, mitigating risk, and risk identification.

Identification of Risk

In this first stage, you define the universe of risks that your organization might confront. Simply put, the risk universe is a catalog of all potential dangers. Examples include credit risk, regulatory risk, operational risk, legal risk, political risk, and regulatory risk. The organization can then group those risks into core and non-core categories.

Risk Assessment

Risk assessment helps a company understand the nature and likelihood of damage from a specific risk. Fundamentally, the risk assessment wants to determine the potential harm of a risk, should it happen; and the probability that a risk will strike, given the company’s current policies, procedures, and controls to manage risks.

Risk Response

Once you have assessed the threat of a risk, management must decide how to handle it. Typically the organization will make one of four choices: accept the risk as it is; transfer the risk to another party (say, by taking out an insurance policy); reduce the risk by adding new controls to prevent harm; or avoid the risk entirely by not taking any actions that might trigger it.

Monitoring and Reporting on Risk

To assure that risk levels stay at desired levels, it’s important to monitor risks and then report on those risk levels to key decision-makers. For example, financial firms churn out daily risk reports based on their transactions. Other organizations could have less regular reporting requirements.

How Do You Create a Risk Management Plan?

The techniques and tactics used in a successful risk management strategy are numerous. For example, avoiding risk or moving a piece of it to another project may be the plan of attack to lessen the impact.

Other risk management techniques could offer the idea of accepting the risk. An extensive cost/benefit study is conducted before a decision is made. The organization’s risk-prioritization strategy will also affect the risk management strategy. Risks are assigned a weight based on relative priorities; for instance, one business could be more concerned with operational or strategic risks than with legal and physical ones. The strategy, then the plan, is determined by the order of risk prioritization.

Before the final draft, an efficient risk management plan may go through the following in addition to keeping in mind the risk management cycle:

Compile a List

It’s vital to make a list of potential dangers before beginning or deciding on anything else. Even the most minor things must be attended to. Something that right now seems like a bit of trouble might develop into a risk shortly. Particularly in project management, this is true. List the project categories, and then assess the risks in each. For instance, a cost category could exist; identify the variables that might raise costs and create a list.

Set the risks in order of importance by prioritizing them

First on the list are those that require immediate attention. Risks are ranked according to their potential impact and chance of happening.

Create an action plan

Plans are created to lessen the risk’s effect and stop the occurrence. Additionally, a plan of action is created for each risk, including who will be accountable for what and what the backup plans are in the event of an incident.

Using human resources

People are now assigned specific jobs and placed at specified times. They collaborate with the whole team and are specifically sent out to carry out planned actions if the predicted dangers materialize. There must be a timeline since these tasks must be carried out within a specific time window.

Communication

Finally, stakeholders will be informed of the plan (internal and external becomes necessary). Then, give the project to the people making the critical interventions. Describe the deadlines, procedures, and obligations.

The risk management cycle, which serves as the fundamental guideline, is used in concert with the plan’s creation. Both are interdependent; in fact, the above-discussed actions in step 3 are impossible without complete knowledge of the cycle.

Why is Risk Mitigation Important?

The act of minimizing or reducing hazards is known as risk mitigation. Therefore, it’s crucial to pick a strategy that fits your company’s profile and line of business continuity when developing a strategy for decreasing potential risks and working with an action plan.

Here are some reasons risk mitigation is crucial:

A thorough risk mitigation strategy aids in establishing processes for risk avoidance, risk reduction, or risk impact reduction on companies.

• It provides companies with guidance on how to manage and bear risks. This aids a company in attaining its goals.
• The capacity to comprehend and manage dangers boosts an organization’s self-assurance and aids in helping it make the best possible commercial judgments.
• It lessens the organization’s legal liabilities and improves its stability.
• It shields those engaged and the business from any possible harm.
  
  

5 Best Practices for Risk Management

Risk management is an ongoing process and doesn’t end once your risks have been identified and remediated. Therefore, your organization’s risk management practices should be revisited every year to ensure policies, procedures, and risks are up-to-date and relevant.

Here are five best practices to keep in mind as you create and deploy your organization’s risk management plan:

• Implement Risk Accountability for every employee. Creating enterprise-wide accountability will help incorporate risk-based thinking into your day-to-day activities while promoting a beneficial, risk-aware culture.
• Get a champion Risk from the Top on board for your risk management plan to be truly effective.
• Conduct Regular Risk Assessments to keep your risk profile (or cyber risk profile) up to date and ensure your business leaders have the most current information before the decision-making process that could impact your organization’s risk profile.
• Quantify & Prioritize Risks, including their probability and impact, as well as mitigation costs, so you know best where to maximize the return on investing in risk treatments, including your compliance program.
• Implement Risk Treatments, including strong controls, metrics, and management tools to help with ongoing risk management and actively reduce your top priority risks.
  
  

What is a Risk Assessment?

The systematic process of discovering, evaluating, and controlling risks and hazards is known as a risk assessment. A competent individual determines the steps that need to be taken to reduce or eliminate risk in the workplace in every given circumstance.

One of the critical elements of a risk analysis is risk assessment. Risk analysis is a multi-step process to identify and analyze all potential risks and problems that might harm the organization. This is a continuous procedure that is updated as required. Therefore, these ideas are related and adaptable on their own.

A crucial step in maintaining the health and safety of your staff and clients is identifying threats utilizing risk assessment methodologies. Businesses must undertake risk analyses per OSHA regulations. The Occupational Safety and Health Administration (OSHA) standards state that the personal protective equipment and tools a worker may require for their job depend on how dangerous the situation is or how much risk there is.

Since the potential dangers today might vary by industry, recommendations are accessible for various sectors; agribusinesses are one such sector. Manure storage, tractor operation, animal handling, behavior, and health present particular dangers for this sector.

How to Conduct a Risk Assessment

Certain dangers are not worthwhile. However, what behaviors, policies, or processes are high-risk is not always obvious.

The many types of risk assessment are helpful in this situation.

Companies may identify and plan for future hazards through a risk assessment to prevent catastrophic outcomes down the road and maintain the safety of their staff.

The process of risk assessment can start once you’ve planned and assigned the appropriate resources. Follow these five actions.

Determine the risks

Identifying the dangers your staff and company face is the first step in generating your risk assessment.

See what procedures or behaviors can jeopardize your company by peering around your office. Include all facets of labor, including remote employees and irregular tasks like repair and maintenance. To find out what dangers have already affected your business, you could also look at accident/incident reports.

Establish who could be the most harmed and how

Consider how business operations or outside influences may hurt your staff when you look around your company. Then, consider who will be injured if each of the hazards you identified in step one comes to pass.

Record your findings

If your office has more than five employees, your risk assessment procedure must be documented by law. Your plan should outline the risks you’ve identified, the people they affect, and your mitigation strategy. The documentation-or risk assessment plan-should demonstrate that you:

• Inspected your workspace carefully.
• Figured out who would be impacted
• Managed and dealt with clear dangers
• Initiated safety measures to minimize risks
• Engage your staff in the process at all times.

Review your analysis and make any necessary updates.

Because your workplace is constantly evolving, so make threats to your business. Each time new tools, procedures, or personnel are used, there is a chance that a new hazard will arise. To maintain the pace with these emerging risks, you should regularly review and update your risk assessment procedure.

Facilitate Risk Management with ZenGRC

Increasing risk visibility is essential for fostering a strong, risk-aware culture. Utilize ZenGRC’s complete risk software solution to increase insight into your risk picture. With the help of ZenGRC, you can take the required steps to reduce company exposure by seeing where risks are present and where they are evolving.

ZenGRC offers multivariable scoring to support your assessment of connections’ hazards. In addition, its user-friendly processes and automatic warnings allow continuous risk monitoring, so you can identify and address problems in real time.

With ZenGRC, you may overcome risk management difficulties and recognize the significance of a substantial risk culture. Request a demonstration of this integrated risk management solution. Schedule a demo for more info!

Organizations across all industries are becoming more reliant on digital technology to get the job done. In this era of digital transformation, technologies such as the Internet of Things (IoT), social media, Machine Learning (ML), big data analytics, Artificial Intelligence (AI), and Augmented Reality (AR) exist to help organizations realize their strategic business objectives.

Ultimately, these new technologies maximize speed, agility, efficiency, and profitability for the organizations that utilize them. Whether you want to streamline your operations, adopt new business models, or improve your customer experience — these are often the driving forces behind an organization’s decision to adopt new digital initiatives.

The benefits of digital transformation are starting to catch on for many business leaders. 89 percent of organizations already have plans to adopt a digital-first strategy, and 74 percent of executive decision-makers see digital transformation as a priority for their company.

Although digital transformation and adopting new technologies create various illustrious business opportunities, they also inherently introduce new risk forms.

In this article, we’ll introduce ten common types of digital risks and provide a detailed description of each so that you can better understand them and position your business to manage digital risks more effectively and efficiently.

What are Digital Risks?

Called digital risk, these unwanted and unexpected outcomes are a result of digital transformation, and they’re something that every organization will eventually need to learn how to manage if they want to survive.

Digital risks include cybersecurity risks, third-party risks, and data privacy risks, which we will examine more closely in the next section. One of the most common types of disruptions that stems from digital risks is that of a data breach. This security incident can occur via a variety of exploitable vulnerabilities.

As more and more organizations start to embrace the age of digital transformation, it’s critical that your organization’s information security team can effectively keep your business secure while enabling growth and innovation. However, your attack surface will only expand as you scale, increasing your exposure to outside threats.

By implementing digital risk protection and a digital risk management program unique to your organization and its vulnerabilities, you’ll be better prepared to identify and mitigate digital risks before they harm your organization.

What are Common Digital Transformation Challenges

When an organization undergoes significant changes, it will likely face various problems and obstacles. This also applies to digital change, and businesses may suffer complications if the shift is not seamless.

The following are the most typical digital transformation challenges:

Inadequate Organizational Change Management Approach

A structured strategy for managing changes in a company, in this example, driving digital transformation, is called Organizational Change Management. It might be challenging, but it is critical.

One of the fundamental causes for the high failure rate is a lack of adequate organizational change management, which can have a detrimental influence on an organization’s digital transformation.

Additionally, organizational change management addresses various organizational components rather than just one.

For example, it begins at the top and encompasses changes in culture, attitude, procedures, structures, and the overall business model.

A solid and effective change management plan is critical for success since it boosts an organization’s chances of achieving its transformation goals.

Inadequate Knowledge

When a business strives for digital transformation, proficiency is necessary to ensure its progress. Given the complexity of digital transformation methods, the appropriate skill and knowledge set are needed to accomplish the essential changes.

According to KPMG, Organizations have highlighted skill shortages as a challenge to digital transformation.

44% of poll respondents stated a lack of specialists hampered growth, 32% said adding new people and new systems is expensive, and 29% said a lack of ability to apply these systems slowed progress.

Employees with suitable capabilities in digital transformation methods, cybersecurity, application architecture, and other related IT and non-IT sectors need more supply in organizations.

Constant Evolution of Customer Requirements

Customers’ expectations and needs have risen due to new advancements in customer service, posing a challenge for many businesses.

Even when businesses invest years of work in digital transformation, customers’ expectations will likely change over time as they seek more user-friendly and modernized offerings.

This means that more work is required to install new digital technologies that will suit the ever-changing demands of customers.   

Internal Opposition to Change

Despite their extraordinary capacity to adapt to change, people prefer comfort and regularity since it gives them a sense of security.

Changes, huge ones, can make individuals feel uneasy and generate stress for some, negatively influencing their well-being. As a result, when companies undergo digital transformation, they may encounter employee resistance.

The best approach is to keep employees involved throughout the process and to be open and honest with them.

Furthermore, leaders must be aware that even if they do everything correctly, the rapid changes and new tools, procedures, and technologies can influence their performance and efficiency if the transition is short.

That is why beginning with a gradual transition is critical, as it allows individuals to adapt their mentality and prepare for new developments. 

Security Concerns

Organizations are becoming more vulnerable to risk by implementing remote labor, digital processes, and cloud-based technologies. As a result, to defend themselves against attacks, businesses must develop more robust security measures and increase their cybersecurity.

Budget Constraints

Another issue with digital transformation is the hefty expenses associated with it. Because this is a significant cost, companies must carefully plan the budget and develop a strategy that addresses and responds to the demands of both consumers and organizations.

10 Types of Digital Risks You Should Know

As you learn about the most common types of digital risks, you’ll probably notice that many have overlapping consequences. For this reason, putting a solution in place to address one of them may also help you manage others.

Cybersecurity Risk

Cybersecurity risk refers to the risk of a cyberattack — an attempt by a malicious actor (or actors) to damage or destroy a computer network or systems.

In the context of a growing attack surface in an increasingly sophisticated threat environment, cybersecurity risk is probably one of the most important — and growing — types of digital risk today.

Cyberattacks are often executed to access sensitive information and then use it maliciously, whether for extortion, identity theft, or simply to interrupt business continuity.

The most common types of cybersecurity threats include malware and ransomware, social engineering attacks including phishing, Man-In-The-Middle (MITM) attacks, Distributed Denial of Service (DDoS) attacks, Structured Query Language (SQL) injection, and Domain Name System (DNS) attacks.

As organizations’ reliance on technology to support a remote workforce continues to grow, the number and severity of cyberattacks will likely increase.

When digital assets are moved away from an organization’s internal networks and employees connect externally to the digital environment, the risk of unauthorized access to sensitive information rapidly increases.

With the proliferation of the hybrid work environment following the COVID-19 pandemic, we saw how cybercriminals can take full advantage of the new vulnerabilities introduced to organizations and their workforce from increased reliance on digital technologies.

A cybersecurity incident like a data breach can be not only a substantial financial burden that many organizations simply can’t recover from — it can also be a massive blow to your organization’s reputation. Additionally, legal ramifications can often result in fines or even jail time.

To avoid cybersecurity risks: you should start by identifying and analyzing your critical assets, such as customers and employees, technology, and software, along with what cybersecurity vulnerabilities and exposures those critical assets create.

Use this information to help you create a cyber risk management plan for your organization’s data, including regular staff cybersecurity training.

You should also regularly ensure that your cybersecurity protocols are up to date and adhere to data privacy regulations, implementing continuous monitoring to ensure that all your bases are covered.

This is where tools can help — start with antivirus software and firewalls and slowly build up your portfolio of security applications to avoid redundancies or outdated approaches.

Workforce Risk

Although companies rely heavily on technology to carry out their business processes, the human element of risk will always be an essential factor for consideration. Your employees inherently put your organization at risk in various ways, intentionally or unintentionally.

The dynamic nature of today’s workforce and the gig economy also means that your organization might face some problems regarding talent acquisition.

Finding well-versed employees in emerging technologies is difficult enough, but retaining those who are experts in their field can be even more challenging.

In addition to skill shortages and high employee turnover, today’s flexible workforce and hybrid working environments mean that employees are likely to make more demands regarding their quality of work life.

Keeping your employees happy will reduce the likelihood that they will leave and the chance that they will act maliciously against your company.

Organizations often overlook insider threats because they want to trust their employees. However, employees with access to your most sensitive information should be monitored closely to reduce the risk they pose to your organization.

To avoid workforce risks: provide regular training for your employees, covering topics such as cybersecurity, social engineering, internal controls, and an overview of all the digital risks posed to your business.

The better informed your employees are, the less likely they are to make a mistake. You should also implement the principle of least privilege wherever possible, ensuring that your employees only have access to the information they need to do their job.

Identity and access management practices such as multi-factor authentication and strict password policies will help protect your organization internally and externally.

If you aren’t already, prioritize your employees’ job satisfaction wherever possible to avoid risks such as high employee turnover.

Cloud Risk

As more and more organizations move to the cloud, this introduces several new risks, including changes in architecture, implementation, deployment, or management of new digital business operations or Information Technology (IT) systems.

If your organization has already migrated to cloud computing technology, you’re probably already familiar with some of the risks associated with public cloud providers.

Cloud outages, in particular, are an essential factor to consider when deciding whether or not to adopt cloud technologies. For this reason, many organizations have moved to a multi-cloud or hybrid cloud approach, which can also introduce several risks.

To avoid cloud risks: ensure you are well-versed in cloud service platform providers and are familiar with everything they provide and don’t.

Whether you choose to operate in the public cloud, private cloud, a combination of the two (hybrid cloud), or using multiple cloud solutions (multi-cloud), you need to know the details concerning their strategy, Service Level Agreements (SLA), and pricing model.

Before agreeing with any cloud provider, you should know exactly what to expect.

Compliance Risk

These are risks related to compliance requirements driven by new technology and the scope of data your organization creates.

With any new technology, new requirements or rules often need to be implemented, or you risk noncompliance with regulatory requirements for business operations, data retention, and other business practices.

As new technologies continue to emerge, compliance requirements change as well. For this reason, you must ensure that your organization is up to date with its compliance in real time, or you risk legal fines — or even jail time.

However, compliance risk management doesn’t begin and end at your perimeter. Your third-party relationships also inherently put you at risk of noncompliance, and it’s your responsibility to ensure that any vendor or service provider you do business with along the supply chain also meets compliance requirements.

To avoid compliance risks: start by listing all the regulatory requirements and industry standards you — and your third parties — must meet.

Consider using a Governance, Risk Management, and Compliance (GRC) software solution to help you implement, monitor, and measure the effectiveness of your internal controls and any gaps in your compliance.

Third-Party Risk

Today, organizations in virtually every industry work with a third party, whether a supplier, vendor, contractor, or service provider.

No matter the nature of your relationship, your organization likely relies on third parties to perform several business functions that are critical to your business operations.

However, outsourcing to any third party inevitably creates risk. Whether it’s legal, compliance, financial, strategic, or reputational — trusting third parties to follow through with their end of a business agreement opens up your organization to several potential disruptions.

For instance, any vulnerabilities related to your intellectual property, data, operations, finances, customer information, or other sensitive information are all considered third-party risks when those third parties have access to your networks and systems.

To avoid third-party risks: implement a third-party risk management plan as part of your overall risk management program. This should include a vendor risk management policy and a detailed description of the procedures and policies for each step in the third-party risk management process.

Regularly send out questionnaires and surveys to your third parties to ensure they implement the appropriate cybersecurity measures and comply with regulatory requirements.

You should regularly review your third-party relationships and implement continuous monitoring to ensure you are instantly aware of any shortcomings.

Sometimes, you may even need to conduct an in-person audit of your third parties, depending on their answers to your questionnaires.

Technology Risk

With any new technology, there’s often a learning curve. As your organization becomes more accustomed to the latest technologies it relies on, you’re likely to notice several new risks that maybe weren’t as apparent as before.

For example, the potential unavailability of critical systems due to power failures, dependencies, and incompatibilities can directly impact your business processes and employees, sometimes even halting operations altogether.

To avoid technology risks: make sure your disaster recovery plan and business continuity plan account for any technologies you simply can’t live without and stipulate an alternative solution should one of those technologies fail. You should also regularly back up your data in multiple on-site and off-site locations to ensure you can still access your most critical information in the face of disruption.

Make sure all your employees are trained on any new technologies you introduce, including educating them about the potential risks they might pose.

Automation Risk

Although it’s touted as the future of risk management, automation can sometimes negatively impact business processes. Optimizing and automating processes can save you time and money, allowing for more effortless scalability — but automation also has some downsides.

For instance, some automation solutions can unknowingly introduce software incompatibilities or add redundant operational complexity.

At the same time, more software means more vulnerabilities, which can escalate the likelihood of a data breach. If you adopt new software, it’s up to you to ensure it’s up-to-date and that any vulnerabilities are patched via software updates.

AI-based automation tools can also create risks that are often difficult to predict long-term due to the constantly changing nature of the technology itself. Implementing this type of automation can often result in operational setbacks, increased complexity, and amplified vulnerability to cyber threats.

To avoid automation risks: your IT department should investigate any potential risks posed by automation software and configure tools to address them.

Make sure any new software you install addresses vulnerabilities via patching and updates, and regularly check online databases for Commonly Exploited Vulnerabilities (CVEs) to determine whether they could affect your business.

Ultimately, the automation software you use should make your job easier, not more difficult. It may be time to move on if a solution isn’t working for you.

Resiliency Risk

Resiliency risk refers to the risk of an adverse event following adopting new technology and the difficulty of minimizing the damage caused. This type of risk has to do with the availability of your business operations and is mainly concerned with business continuity.

As stated before, introducing any new technology inherently risks your business’s ability to operate effectively and efficiently.

For instance, if your cloud service provider experiences an outage and you cannot access data in the cloud, many of your employees will likely be unable to perform their primary business functions. Or, perhaps a cyberattack on your operational technology systems will completely halt your business altogether — what will you do then?

Ultimately, how resilient your business is will depend on how flexible you are. Relying too heavily on a single technology to perform critical tasks will likely lead to a disruption in your business continuity and will test your organization’s resilience.

To avoid resiliency risks: create a comprehensive business continuity plan with a disaster recovery plan.

Make sure you have alternative solutions for any technologies you rely heavily on to perform your primary business functions, and ensure your employees are well-versed in the processes and procedures that will come after any disruption.

Data Privacy Risk

This type of risk involves your organization’s ability to protect personal information, including full names, email addresses, passwords, physical addresses, and even dates of birth. Cybercriminals can easily misuse this type of data to harm or misuse your employees’ — or customers’ — identity.

Data breaches have been at the forefront of cybersecurity and are usually the aim of a cyberattack. Especially where healthcare organizations are concerned, keeping your employees’, customers’, and clients’ data safe is paramount.

Not only do you owe it to the people relying on your organization to keep their data secure, but a security incident resulting in a data breach often has far-reaching consequences for the organizations that fall victim to a breach, including reputational, financial, legal, and regulatory harm.

To avoid data privacy risks: implement strict cybersecurity measures, including identity and access management, multi-factor authentication, and password policies. You should also regularly train your employees to spot and avoid social engineering attempts that could result in an internal breach.

Again, you’ll need to consider your third parties when preventing data privacy risks, as many of these third parties probably have access to your and your customers’ sensitive data.

If you experience a breach, you should alert anyone who’s been compromised before the attackers do — this might help you save face in the long run with any of your customers who might have had their Personally Identifiable Information (PII) stolen.

Social Engineering Risk

Although social engineering attempts are technically a cybersecurity threat, the rapid introduction of new technologies — especially social media — means that social engineering has grown into an unmanageable risk deserving of its own category.

Social engineering attempts range from phishing attacks via email, misuse of social media, smishing, vishing, whaling, and more.

The most common type of social engineering attack is probably phishing — an attempt to trick users into bypassing everyday cybersecurity practices and giving up sensitive data such as usernames and passwords, bank account information, social security numbers, and credit card data.

To avoid social engineering risk: implement cybersecurity awareness training for all your employees across your organization, emphasizing the importance of phishing reporting. You should also consider running random phishing simulations and regularly test employees’ ability to spot phishing attempts, rewarding success and providing additional training for any employees with difficulty.

You should also push HTTPS on your website to create secure, encrypted connections, institute access management policies and procedures, use reliable email and spam filters, require multi-factor authentication, or even use email encryption and email signing certificates.

Mitigate Digital Risks with ZenGRC

Managing digital risks takes time, and it’s complicated. As such, information security teams must first understand what digital risk is and the current types of digital risk to implement the most effective digital risk management strategies. Fortunately, some solutions can help.

ZenGRC is an integrated Governance, Risk Management, and Compliance solution designed to provide you with actionable insights to gain the visibility you need to stay ahead of threats and communicate the impact of risk on high-priority business initiatives.

Turn the unknown into quantifiable and actionable risk insights with built-in expertise that identifies and maps risks, threats, and controls so you can spend less time setting up the application and more time using it.

A single, real-time view of risk and business context allows you to communicate to the board and key stakeholders in a way framed around their priorities, keeping your risk posture in sync with the direction your business is moving.

ZenGRC will notify you automatically of any changes or required actions so you can be on top of your risk posture like never before. Eliminate time-consuming, manual work and streamline collaboration by automating workflows and integrating with your most critical systems.

With ZenGRC, you can leverage your compliance activities to improve your risk posture using AI. The ZenGRC solutions allows you to see, understand, and take action on your IT and cyber risks.

Now, through a more proactive approach, you can give time back to your team with ZenGRC. Talk to an expert today about how ZenGRC solutions can help your organization mitigate cybersecurity risk and stay ahead of threats.