What Is Cyber Risk?

What Is Cyber Risk?

In today’s dynamic business world, it is difficult to bring to mind a type of business that does not depend upon IT to run critical business functions, examples being accounts in and out, payroll, e- mail, online payments, using a company website and expands to manufacturing process..

Simply put,cyber risk can be defined as risks connected to any online activity, electronic systems, internet trading, storage of personal data and technological network which can cause grave damage to the reputation of an organization and financial loss. The various types of cyber attack can be broadly categorized as follows: Hacker attack, virus transmission, employee sabotage, data breach, human error, cyber extortion and network downtime.

The prospect of a catastrophic cyber risk attack looms large on any business these days. A massive cyber risk attack can cause business interruption and the subsequent loss of reputation and loss of client confidence can be corporate out if business. Thus, among the various questions a CEO must answer, one of the biggest nowadays include, "How prepared are you to fend off a sophisticated cyber attack?"

 

Cyber Risk Management

Cyber Risk Management

Cyber Risk Management

With a constant serious threat of cyber risk looming in the backdrop, businesses need to create a cyber security culture and a “think-tank” approach to tackling cyber risk. Data protection and liability risks dominate the cyber landscape today. Various stakeholders within an organization need to share knowledge for an overall tight security posture.

With new technologies on the rise, cyber risk is constantly evolving. There is even a chance for “hidden risks” to emerge. Businesses should consider how merger and acquisition (M&A) activity and changes in corporate structures will impact cyber security and holding of third party data in particular. Companies need to make decisions around which risks to avoid, accept, control or transfer. Sectors holding large volumes of personal data, such as retail and healthcare and those relying on digitalized technology processes such as manufacturing and telecommunications, are most likely to invest in proper cyber risk management tools. However, financial institutions and the energy, utilities, and transport sectors are also keen given the increasing perils posed by interconnectivity.

Businesses are also exposed to cyber risk through supply chains and, increasingly, will need to consider the impact of an incident in this area such as the liability they could face if they cannot deliver their products or lose customer data, as well as the costs to resolve such issues. Companies will increasingly look to extend protection to their supply chains. The impact of BI from a cyber incident and further development of interconnected technology is of increasing concern to businesses and the market will help spur cyber insurance growth.

Emerging Risks and The Impact of Technology

Emerging Risks and The Impact of Technology

Emerging Risks and The Impact of Technology

The Internet of Things (IOT) will have an increasing influence on the world in which we live and businesses operate. Estimates suggest as many as a trillion devices could be connected by 2020. New technologies create new vulnerabilities and cyber criminals exploit this increase in interconnectivity.

As technology evolves, older devices that remain in use could also create vulnerabilities, especially where they rely on outdated operating systems and unsupported software. The use of outsourced services and storage – such as the cloud – brings risks as well as benefits.

Cyber Risk Management Plan

Cyber Risk Management Plan

Cyber Risk Management Plan

Few proactive ways to put together a solid cyber risk management plan:

Prioritize riskiest asset

Every organization has important data, but not all of it is prioritized as being "material data" of that organization. Depending on business, this could be a number of different things — customer data, intellectual property or trade secrets. Examining cyber risk or the cyber incidents that could have a significant economic impact on a particular organization is the first step to proactive cyber risk management . It is important to decide how to fend off anyone who tries to compromise it.

Develop a Strategy for Approaching Risks

In order to properly develop a strong security strategy, one must keep in mind that cyber security is all about people and process.

People: It is critical to ensure that the people in an organization are aligned with the company's cyber security strategy and are responsible for implementing their share. Every individual within an organization should understand how to manage their electronic equipment and what to do in particular web-based scenarios.

Process: It is absolutely critical for every organization to implement an acceptable-use policy. Having a set guidelines on using technology while travelling, categorizing data based on importance and limiting accessibility are some of the steps in that direction.

Understanding the supply chain risk

Third parties including any and all software providers, business associates, contractors and subcontractors may make an organization vulnerable. Putting a number of controls in place to help soften the potential fallout such as:

• Identify all critical third parties
• Assess the risk of each critical vendor
• Continuously monitor third parties
• Write detailed security expectations into each vendor contract

Exercise a security incident:
One should assume a "when" not "if" mentality when thinking about a security incident occurring. Steps can be taken to prepare for a data breach , including running a security incident exercise. This helps an organization show the management team that it is prepared for a cyber attack, be it large or small. It is important that everyone knows how to respond, and that plans are in place for notifying customers, investors, law enforcement and forensics firms.

Communicate cyber risk management program effectiveness to the board:
A final critical step to addressing cyber risk is ensuring that the board of directors is brought up to speed on the effectiveness of cyber security program. The board is more involved in cyber security today than ever before, and they need to know how the current program is working. CISOs and security professionals should focus on presenting insightful metrics so they can make the right decisions for the organization safety.

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