6 Steps to Perform a Cyber Security Risk Assessment

Organizations throughout the planet are dealing with a flurry of cyber security threats on a daily basis. Digital attack vectors and techniques of cyber criminals are becoming more sophisticated and powerful than ever – making security risk assessments critical for businesses. Cyber security risk assessments allow businesses to identify, contain, and mitigate different types of cyber risks while identifying and patching security vulnerabilities in their current information technology and information systems and overall business infrastructures.

What is Cyber Risk?

Cyber security risks, digital threats, internet security risks, data security risks, etc. are all some of the interchanging terms used to describe security risks that threaten the safety of intellectual property, data/information, digital gadgets, IT equipment, and other critical assets of an individual or an organization. Common cyber risks include data breaches, identity theft, financial frauds, phishing, ransomware, and many other types of malicious cyber attacks.

What is a Cyber Risk Assessment and why is it important?

As technology evolves, the digital attack vectors and techniques of cybercriminals also continue to evolve and change. Traditional cybersecurity solutions are becoming obsolete as modern security threats emerge. Organizations need to continuously analyze, test, maintain and innovate their security parameters to ensure protection from existing cyber threats while also strengthening their cyber security infrastructure to cope with future security risks. Below are some of the primary reasons why conducting risk assessments for companies is important.

1) Identification of Cyber Security Weak points

Many organizations are not aware of the security vulnerabilities present in their information systems and overall business infrastructure. Such overlooked security vulnerabilities can allow malicious cybercriminals and hacktivist groups to compromise the deployed security parameters of the organization, ultimately allowing hackers to cause irreversible damage to organizational assets. Cyber risk assessments allow organizations to find security vulnerabilities and patch them before these weaknesses are exploited by hackers.

2) Compliance with Industry Regulations

Regulatory standards like PCI DSS, HIPAA, and ISO 27001 prescribe recommendations for protecting data and improving information security management in businesses. Organizations require compliance with such security standards to ensure cyber security in their processes, operations, overall business infrastructure. Security risk assessments help companies to find all the weak areas that can be improved to achieve various security and regulatory compliances.

3- Preparation Against Future Security risks

One of the core reasons why organizations conduct risk assessments is to prepare against future cybersecurity threats. The security parameters that an organization may have in place can easily fell short against advanced future digital threats. Security risk assessments allow organizations to analyze, test, innovate and upgrade their weak security parameters to cope with current and future security risks.

6 Steps to Performing an Effective Cyber Risk Assessment

The National Institute of Standards and Technology (NIST) has developed a cybersecurity framework to provide a base for risk assessment practices. However, below 6 steps summarize the essence of NIST risk assessment practices.

Step 1:  Identification & Characterization

The first step in a security risk assessment is to critically identify and categorize all the processes, functions, operations, and applications of your organization. This categorization can be done by taking into account different aspects that can help you determine risks. These aspects can include asking questions like:

• How does a specific organizational process, function, or application work?
• What is the data flow?
• Where does the information go?
• What kind of data does it use?
• Who uses the system?
• What are the internal and external interfaces that may be present?
• Who is the vendor?

Step 2: Identify risks

Every risk assessment includes the identification of different types of security risks. The identification of possible risks can allow your organization to prepare appropriate defensive mechanisms. Such security risks can include but not limited to the following:

• Unauthorized access due to a hacking attack, malware infection, or internal threat
• Misuse of information/privilege/credentials by an authorized user
• Data leakage/theft
• Loss of data due to corruption, equipment failure, or cyberattack

Step 3: Determine Inherent Risk & Impact

After identifying potential security vulnerabilities and risks in your organization’s systems, processes, applications, and operations, the next step in the risk assessment is prioritization and classification of the identified risks. The risks can be classified into three categories based on their feasibility and impact level. These classification categories are:

• High – Impact could be substantial.
• Medium – Impact would be damaging, but recoverable, and/or is inconvenient.
• Low – Impact would be minimal or non-existent.

Step 4: Analyze the Control Environment

An organization can have a plethora of access and controls in place to secure and manage different aspects of the business. Analyze all the available organizational access and controls to determine any weaknesses and their relationship to the identified security risks. Examples of organizational controls can include:

• User Authentication Controls
• User Provisioning Controls
• Data Center Physical & Environmental Security Controls
• Organizational Risk Management Controls
• Continuity of Operations Controls
• Infrastructure Data Protection Controls
• Administration Controls

After identifying the security gaps in your organizational controls and their relationship with identified security risks, classify the organizational controls into the below control assessment categories to determine the effectiveness and efficiency of the deployed controls.

• Satisfactory
• Satisfactory with Recommendations
• Needs Improvement
• Inadequate

Step 5: Determine a Likelihood Rating

In this step, critically assess the likelihood of a security breach or incident taking place leveraging the identified security risks and vulnerabilities in the business infrastructure and security controls. Use likelihood ratings to list down all the security risks and their likelihood of occurrence. Examples of likelihood ratings are:

• High – The threat-source is highly motivated and sufficiently capable, and controls to prevent the vulnerability from being exercised are ineffective.
• Medium – The threat-source is motivated and capable, but controls are in place that may impede successful exercise of the vulnerability.
• Low – The threat-source lacks motivation or capability, or controls are in place to prevent, or at least significantly impede, the vulnerability from being exercised.

Step 6: Calculate The Risk Rating

There are many factors that contribute to increasing or reducing risks. However, a simple universal formula to calculate risk and derive risk rating is:

Impact (if exploited) * Likelihood (of exploit in the assessed control environment) = Risk Rating

Some examples of risk ratings are:

• Severe – A significant and urgent threat to the organization exists and risk reduction remediation should be immediate.
• Elevated – A viable threat to the organization exists, and risk reduction remediation should be completed in a reasonable period of time.
• Low – Threats are normal and generally acceptable, but may still have some impact to the organization. Implementing additional security enhancements may provide further defense against potential or currently unforeseen threats.

Regular risk assessments play a critical role in protecting an organization from a wide range of security threats. Organizations that do not conduct security risk assessments are more likely to overlook security vulnerabilities present in their cyber security infrastructure – ultimately leading to security breaches and other complications. Conducting regular cyber risk investigations can allow your business to identify, assess, mitigate, and prevent current and future security risks.