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What is the concept of Cyber Risk Management?

Narendra Kumar

| Updated: Mar 09, 2018 | Category: Latest News

cyber risk management

Concept of Cyber Risk Management

The risks &prospects which digital technologies, devices & media get us are obvious.  Cyber risk is never a matter decently for the IT team, though they evidently play a dynamic role. An organization’s risk management function necessity a detailed understanding of the frequently developing risks as well as the practical tools & techniques accessible to address them.

Cyber risk is a risk related to “financial loss, disruption or damage to the reputation of an establishment from some kind of disappointment of its information technology structures”.

As big businesses carry on accepting cloud infrastructure & approaches, the urgency for IT to implement cyber risk management measures to tackle cybersecurity risks is high. Though new technologies bring productivity gains, at times, this can be at the cost of data security.

This present situation demands an integrated cyber risk management method for undertaking all cybersecurity risks & threats in cyberspace.

The cyber risk protection phase effects numerous technologies hired together to competently address all the cybersecurity risks; from exposure to triage, response & remediation.

Multiple security technologies are leveraged through Cyber risk management platforms such as SIEM, advanced & next-generation network, endpoint security & DLP, provided that deeper analytics & insights for an integrated method to grip overall threat lifecycle & address cybersecurity risks holistically.

What are the Key Components of a Cyber Risk Management Framework?

  • Protect valuable data

Organizations need to identify their most valuable information assets, where these assets are located at any given time, & who has access to them.

  • Monitor for cyber risks

Outdated security checking approaches classically identify & respond to cyber threats in isolation. Security tools are intended to recognize specific uncommon configurations or traffic types, & then alert operational teams to inconsistent activity.

Operative cyber-risk monitoring, the main emphasis on building a sustainable & resistant methodology to evaluate intellect inputs from numerous functional teams & to associate & enthusiastically adjust in real-time the establishment’s risk position.

  • Understand your “cyber perimeter”

Today, a financial institution’s cyber boundary extends to locations where data is warehoused, communicated, & accessed by internal employees & reliable associates. Establishments must safeguard they have transparency into this protracted cybersecurity border since any weakness in the boundary can develop a safety resistance.

  • Improve cyber intelligence

Most financial organizations’ threat-analysis efforts are dispersed across numerous functions, physical locations, & systems. This disorganized nature &absence of a common practice to leverage intellect can be an important barrier to robust cyber-risk intelligence[1][. To close the gap, organizations must establish a robust threat-analysis competence that is built on shared intelligence, data, & research from internal & external sources.

  • Report & take action

A robust governing team with the right information, proficiency, & influence will be essential to advance cybersecurity. An actual team can support safeguard that observing systems are fluid & accomplished of exactly replying to cyber threats, & can authorize management to suitably react.

Read our article:Importance of Cyber Security for NBFC

What are the Fundamentals of Cyber Risk Management?

  • Risk Identification

Figure out what wants to get measured & connect the data points. Find attack patterns or any other traffic tendencies that might suggest imminent risks. Identify the utmost threats facing the organization & integrate any of those insights into your incident response strategy. & make sure that effective verification systems are in place to examine whether the persons accessing your association are who they claim to be & not intruders. The National Institute of Standards & Technology has pulled together a long list of specific suggestions about how to prioritize.

  • Get Top Management on Board

Boards need to understand the potential gathering of risks which may threaten the status of their Business Plan, finances & operational presentation. Financial risk management must be a dominant plank of any organization’s governance processes. The senior levels of the company essential to know whether their data assets are being shelteredsufficiently& when to regulate future budgets to bolster security planning. Only the board’s buy-in will ensure that the organization’s security objectives are fully aligned with the larger goals of the Business Plan.

  • Board Communication

Set up an effective communications pipeline between the establishment’s top safety executives & senior management. That means it’s up to the top security executive in the organization to inform the suite about impending potential risks as well as the state of current defenses. Except they obtain up-to-date risk indicators, the set will have no way to judge whether the security condition is improving or getting worse.

  • Update Incident Response

No matter how well defended an organization may be, anticipate coming under cyber-attack at some point in the future. Draw up worst-case situations along with an updated incident response plan. This is the roadmap to identify & arrange the people, processes & technology issues to mobilize in an emergency. Don’t let the response plan gather dust. It should undergo frequent testing to remain relevant & ensure that everyone involved in the drill understands their roles when the alarm sounds for real.

  • Better Job by Employees

No matter how many times they need reminding, employees can always do a better job when it comes to adhering to best practices. It’s up to management to keep encouraging a cyber-aware culture. Make definite that employees are attending to the cyber risks that threaten the business as well as the likely commercial implications of a breach. Sometimes, this may not be as self-evident as it might seem at first blush. Success, in this case, maybe measured in inches, rather than yards. But every little advance counts.

What are the 3 Pillars of Enterprise Cyber Risk Management?

  • Governance structure

A governance structure is the chief pillar of any risk management program. It delivers an enterprise with a body of experts & decision-makers on the possibleinfluences& actions associated with risk decisions. It has authorized that responsibility for cyber risk management falls to activity heads, risk management must be driven from the top of any organization. A general model may comprise periodic meetings of a suite risk committee, informed by mid-level managers in subcommittees. Preferably, the subcommittees must offer risk committee executives options that balance resource demands.

Executives often have difficulty treating technologically complex cyber risks with the same degree of care as other enterprise risks. The risk committee will require a common vocabulary & fair evaluation of risks in order to make & weigh business cases for risk response plans. Regardless of risk type cyber or otherwise even more important is a structured statement of risk appetite, which limits the threat of uncertainty& confusion.

  • Risk Appetite

Every organization must know how much risk it can tolerate. A documented risk appetite statement lists categorized risk tolerance ranges that align with the organization’s strategic objectives. The risk appetite statement helps the organization confidently employ its approach with obvious direction on how much risk can be taken.

The varieties of tolerance in risk appetite would be scaled to accommodate various levels of the organization. This way, all members of the organization can understand when to escalate an identified risk. At a practitioner level, a quantitative appetite statement should provide enough context & direction for the practitioner to conduct everyday activities. For example, explicit limits on unplanned system outages should enable front-line workers to discern if they should procure new software in light of possible vulnerabilities. Appetite statements can be tricky to develop, especially if the organization is culturally intolerant to new risks. However, a thoughtful appetite statement can empower employees to bring risks forward in a quantitative manner that ties risk directly to the organizational strategy.

  • Policy & Procedure

With suitable risk governance & documented appetite, organizations can begin to pile risk management performs into their culture. Managers must communicate prospects to the organization through their management teams, usually through policy & procedure & potentially as part of a global policy structure.

From the first day of employment, employees should be oriented to fundamental risk concepts–not necessarily to the degree of a practicing analyst, but enough to build a fundamental awareness of risk as they perform daily tasks. Similar to Crew Resource Management (CRM)[2][ used by airlines or emergency response procedures used by nuclear power plants, employees should be educated & empowered to raise concerns & take appropriate actions to respond to disruptions. Similarly, the policy & procedure should provide tools that facilitate decision making & resource allocation to prepare for disruptions.

Read our article:How India Inc. is Losing It’s Cyber-security War

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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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