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Rapid technological advancement and rising global connectivity are reshaping the way the world is functioning. From higher productivity to improved customer satisfaction, technology has played a critical role in the growth of businesses worldwide. However, the consequential bad news is that technological advancements have also made organisations increasingly vulnerable to digital risks. However, this does not mean that businesses must compromise on growth and improvement for the sake of security.

The security challenges within these digital environments could be better addressed if organisations knew how to identify these risks and incorporate preventative security measures and controls, along with proactive solutions and detailed plans, to overcome their digital vulnerabilities. Let us discuss the different types of digital risks you should be looking out for and how you can use this information to get a positive ROI.

Types of Digital Risks

Digital risks are increasing in the business world due to the rapid adoption of new disruptive technologies. These risks are seen in various industries and are more pervasive than cybersecurity risks. On a broader scale, digital risks can be classified into physical, technical and administrative risks.

The following risks are the most prevalent in today’s digital world and should be treated as top priorities for your business:

Cybersecurity risk: Cyberattacks continue to evolve as companies become more technology-driven. Attacks like ransomware, DDoS, etc., can bring a halt to the normalcy of any business.

Data privacy risk: As we move forward to a knowledge-based economy, data has become the most valuable commodity in the world. This has resulted in hackers targeting critical business data and misusing them for personal gains.

Compliance risk: Businesses need to adhere to various regulations regarding data privacy, cybersecurity, organisational standards of practice, etc. Any violation can attract heavy fines and penalties for a business.

Third-party risk: When you outsource certain services to third parties, it might compromise the security of your IT infrastructure. For instance, a software tool you develop with an external vendor may introduce some vulnerabilities to your otherwise intact digital environment.

Resiliency risk: This concerns the ability of a business to bounce back and continue operations after an unexpected disaster.

Risks due to human errors: In the UK, 90 per cent of cyber data breaches were caused by human errors in 2019. Whether it’s falling for phishing scams or misusing work devices, human errors can be quite costly for organisations if they go unchecked.

Automation risks: While automation is reshaping the tech industry for the better, it could also give rise to a range of risks such as compatibility risks, governance risks, etc.

Cloud storage risks: The flexibility, ease-of-use and affordability offered by the cloud makes it one of the most popular options for backup and storage. However, the cloud is also prone to various risks such as lack of control over data, data leakage, data privacy, shared servers, etc.

Importance of a Risk Assessment in Managing Digital Risks

The best way to start managing your digital risks is by performing comprehensive security risk assessments regularly. After all, how would you know what your current vulnerabilities or gaps are and where you biggest security challenges lie without an ‘under the skin’ examination? With a risk assessment, you can measure your security posture against various internal and digital threats and determine how equipped you are to deal with these risks. When you perform a security risk assessment you can proactively:

• Identify vulnerabilities: A risk assessment helps you identify which part of your digital environment is relatively weak against various security threats. You can identify which systems are likely to be targeted by attackers and incorporate measures to strengthen these systems. Without the information presented by your risk assessment report, you don’t stand much chance of improving your digital security posture against various vulnerabilities.
• Review and bolster security controls: In most cases, security incidents occur due to a lack of controls in the process. For instance, without proper cybersecurity awareness training and best practices training, employees are unlikely to follow security protocols on their own, which could result in losses due to human errors. Based on the risk assessment, you can upgrade your securities and incorporate preventive measures against various risks.
• Track and quantify risks: To effectively manage various risks, you need to know the effect of these risks on your business. With a risk assessment, you can quantify these risks by identifying the potential losses posed by various threats. This helps you incorporate necessary risk mitigation strategies to prevent your exposure to various risks.

To begin understanding these risks, there are several steps a business owner or risk manager can take. We have more detail on this topic in the following article: Building your Asset and Risk Register.

The Value of Risk Assessment

IT and security budgets are often difficult to explain to management. Everyone understands the consequences of not investing in correct security measures. However, it isn’t that easy or simple to put an exact ROI figure on security investments. The value of risk assessment is based on how you choose to act with the information you get from these reports.

After understanding these risks, you should have enough knowledge to begin prioritising and addressing them based on the impact and urgency of each risk. This process will result in the creation of an Action Plan, which if properly executed will minimise most organisational risks. Some organisations are able to conduct this process effectively by themselves, while others fail to do so.

In this scenario, the real question is – what is the cost of not making this investment?

Let us consider a major data breach for example. It is always about what you stand to lose in the aftermath of a breach. If your business is dealing with valuable customer data, a data breach can result in unrecoverable financial losses as well as reputational damage. Moreover, this might also result in regulatory non-compliance and attract heavy penalties from various regulators. In such cases, reviving a business after a major disaster can be almost impossible.

Here, the cost of investment in security solutions and cyber insurance is negligible since it concerns the survival of the business. You may not be able to measure the exact ROI of the airbags in your car but that does not mean that your survival is not dependent on them. Similarly, the information and insights gained from routine risk analysis are critical to the operation, resilience posture and long-term success of your business.

A thorough analysis can bring you essential insight and indicate the next steps for your organisation. Should you be looking for professional help to identify and address your digital risks, we recommend starting with the Gap Analysis. This process goes beyond a conventional IT Audit, where your company’s cyber security structure is scanned to identify any potential breaches. The main difference here is that we’ll also look into your policies, processes and people to understand where your business is and where you want it to be.

After identifying the Gap, we’ll begin to close it and improve your business’ cyber security structure. To learn more about this process, download our brochure and feel free to get in touch.

Data Sources:
Global Cybersecurity 2020 Forecast Canalys
2020 State of IT Operations Survey, Kaseya