Every business faces risks. Some of them were chosen deliberately. Others are part of the industry they find themselves, especially the risk against their security architecture. Businesses must manage these security risks and be proactive about their responses. That is where a cyber risk management policy comes in.
This guide covers cybersecurity risk management, building an effective policy, and the roles under this specialization.
Introduction: What is Cyber Risk Management, and Why is it Important?
Cybersecurity risk management is a strategic approach to identifying, evaluating, and addressing an organization’s information security risks. It is an ongoing process where everyone plays crucial roles in upholding the IT security posture of the business.
Most organizations have internet connectivity, with some parts of their IT infrastructure open to the outside world. This means they face risks of cyber-attacks
Risk management helps organizations prioritize threats, ensuring the most critical attacks are handled on time. As such, a cyber risk management policy allows businesses to address threats based on each one’s potential harm.
Why It’s Important to Implement Cyber Risk Management
Implementing a risk management policy acknowledges you cannot always eliminate all system vulnerabilities. This is because some business operations will expose your organization to certain weaknesses.
But with a well-detailed policy, you can prioritize the most critical flaws, threats, and attacks. This will help prevent potentially damaging impacts on business continuity, reputation, and customer trust.
A cyber risk management policy also reduces costs and protects revenue. By being proactive, you're saving the company from the huge losses a catastrophic cyber-attack might cause.
In addition, risk management policies ensure businesses comply with regulatory requirements, such as ISO 14971, GDPR, PCI DSS, and HIPAA.
In the following paragraphs, you'll learn the essential elements of a cyber risk management policy and the roles of a Risk Manager. Cybrary has a free course on the Fundamentals of Risk Policies and Security Controls. You’ll learn from a Network Engineering expert about implementing the proper risk management measures.
What Are the Components of an Effective Cyber Risk Management Policy?
A cyber risk management policy must have critical components to be effective. Here are the essential components you need to create a continuous process of identifying, analyzing, and tracking security threats before they cause any damage:
1. Prevention Strategies
Cyber risk management policies must have specific threat monitoring, intelligence gathering, and prevention strategies to ensure cyber-attacks don’t happen in the first place.
These strategies should involve encrypting corporate devices, including tablets, laptops, and smartphones. Encryption will stop unauthorized access if one of these devices is lost or stolen. Your strategy should make employee education about phishing and scams a priority.
2. Public Disclosure Plan and Responsibilities
For many industries and locations, you may be legally required to disclose a data breach to certain people or the public. If it’s a publicly traded company, the SEC’s guidelines state you must provide timely, comprehensive, and accurate disclosure to stockholders.
Your disclosure plan should be stated in the cyber risk management policy. This covers to whom the breach will be disclosed, how, and who will disclose it.
3. Crisis Management and Incident Response Plan
When designing your cyber policy, preparation is essential. You must be ready to act quickly and appropriately during a data breach. Find out how and when the breach happened, what data was stolen, and how many people were affected.
Then, evaluate the risk you face from the breach and how you will reduce it. Inform your clients of the steps you are taking as you manage the crisis. But be sure not to reveal too much information.
If you want to rebuild trust with stakeholders and clients, you should focus on what you plan to improve in future actions.
Your plan should be developed and improved in collaboration with your attorneys, risk managers, and cybersecurity team. Make sure that everyone is aware of their roles within the plan.
4. Data and Business Protection
A cyber liability insurance policy that meets your company's needs should be part of your cyber risk management policy.
Other forms of business liability insurance will not cover the risks associated with using modern technology. This explains why cyber liability insurance was explicitly formed to address them.
Your cyber liability insurance policy can be written to cover the costs of disclosure following a data breach. It can be customized to fit your particular situation.
Developing a Cyber Risk Management Policy Based on the NIST RMF Cybersecurity Framework
The National Institute of Standards and Technology (NIST) has a Cybersecurity Risk Management Framework (RMF) for organizations to follow. It provides a comprehensive, flexible, and risk-based 7-step approach that integrates cybersecurity, privacy, and cyber supply chain risk management into the system development life cycle.
Here are the steps to follow based on the NIST cybersecurity risk management framework:
This involves carrying out essential activities that prepare all levels of the company to manage security and privacy risks. Preparation involves:
- Defining and identifying key risk management roles.
- Establishing organizational risk management strategy and determining risk appetite and tolerance.
- Conducting risk assessment
- Providing a strategy for continuous threat monitoring
The RMF recommends organizations categorize the information processed, stored, and transferred based on impact analysis. This helps to determine the magnitude of the effects on systems' integrity, confidentiality, and availability.
Categorization will also help document system characteristics and approved decisions by the authorizing official.
It is necessary to select, tailor, and document the security controls required to protect the organization and systems commensurate with risk.
This will ensure that:
- Control baselines are selected and tailored.
- Controls are designated based on standard, system-specific, or hybrid.
- Controls are allocated to specific system components.
- There is an ongoing system-level monitoring strategy
- The review and approval of security and privacy plans that reflect control selection, designation, and allocation.
This involves implementing security and privacy controls and documenting how they are deployed.
Assessing ensures the security controls are in place, functioning as intended, and producing the expected results. Here, the organization must select an assessor or form an assessment team.
The professional(s) will provide security and privacy assessment reports, including remediation actions if any deficiencies are found.
Here, a senior official authorizes the system to operate. This ensures accountability by requiring a senior official to evaluate whether the security and privacy risk posed by a system's operation or the use of standard controls is acceptable.
Cyber risk management is a continuous process. Hence, it’s essential to monitor system risks and continuously control implementation. Educating employees on your risk management policies is also crucial.
The Role of a Risk Manager in Establishing a Cybersecurity Strategy
A Risk Manager plays a critical role in managing organizational risks and creating a policy. If you’re already a cybersecurity Risk Manager or want to become one, here are some of the roles you’ll perform in establishing a cybersecurity strategy:
1. Collaborate With the CISO
To provide robust cybersecurity resiliency, it's essential to work together with the Chief Information Security Officer (CISO).
These two will help create a well-detailed risk management policy that spells out important roles and duties, vulnerabilities, and the impact of a potential breach. Collaborating with the CISO will help the Risk Manager prepare and balance a risk management budget.
Together with the CISO and Incident Responder, they can develop business continuity plans.
2. Ensure Adherence to Compliance Regulations
When developing a cybersecurity policy, it’s essential to ensure it aligns with relevant compliance regulatory requirements.
Risk Managers must ensure appropriate documentation to show the organization implemented safety-related procedures before, during, and after a cyber-attack.
3. Lead Continuous Threat Monitoring and Risk Assessment
Since risk management is continuous, someone will have to take responsibility for the ongoing process. A Risk Manager will continually monitor threats and provide risk assessments.
This cybersecurity professional will measure the organization’s exposure by identifying, analyzing, and quantifying the risks that impact business operations.
4. Provide Reports and Assessments to the Board or Senior Management
When building a cybersecurity team, the CISO hires a Risk Manager to establish the company's existing and potential risks. Hence, the Risk Manager must provide regular risk assessment reports to the CISO, including remediation recommendations.
5. Ensure Cyber Liability Insurance is Included in the Policy
Cyber-attacks are so frequent that they're now more of a "when" than an "if." The financial impact of these data breaches and malware attacks is also catastrophic. Due to the likelihood of a cyber-attack, cyber liability insurance is critical.
This can help the organization cover costs associated with cyber-attacks and data breaches, such as recovering compromised data, repairing damaged systems, and more.
The Risk Manager must ensure cyber liability insurance is a part of the policy and cybersecurity budget.
A cyber risk management policy can help organizations effectively protect their systems and data. It is a proactive approach to identify vulnerabilities, balance risk appetite and tolerance, and prioritize threats based on their potential impact.
The best risk management policy requires employee cooperation across all levels. Educating your employees on security awareness through cybersecurity training programs enables your team to respond appropriately to cyber threats and avoid falling victim to cyber scams.
Cybrary provides threat-informed training that equips employees to manage risks confidently. Cybersecurity professionals at all stages of their careers can skill up through free training resources that provide real-world challenges. Start for free now.