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What is Cyber Risk Management?

Risk management is a fundamental component of any successful organization and has been since the dawn of corporations as we know them. The primary function of risk management as a whole is to allow business leaders to determine the best course of action based on the probability of a given outcome and the possible determinants of that decision. As businesses have embraced more and more technology, risk management has had to evolve to oversee not just traditional forms of potential risk - operational, strategic, financial - but also the risks associated with this new wave of digital transformation. As organizations have digitized, cyber risk management (CRM) has become a pillar of an effective risk management strategy.

Why Cyber Risk Management is Important

Cybersecurity risk management is an essential component of any modern risk management initiative. As the expanse of technology has become intertwined with everyday life, cyber risk management processes seek to mitigate and analyze the multitude of new risks that come with it; this is primarily done through risk assessments where multiple variables are considered and scored to identify risks from the most impact to the least. From cyberattacks, web vulnerabilities, malware, data breaches, and everything in between, cybersecurity risk management operates as much more than a compliance solution, effectively protecting your company’s cyber assets and ensuring cyber resiliency against numerous mishappenings. Cyber risk management offers itself as a tool for appropriately benchmarking and categorizing an entity’s cyber posture for continuous testing and standardization that’s specific to the needs of the individual business.

The foray of cybersecurity risk management has caused a shift in the way many organizations have approached enterprise risk management from a program that focuses on physical and monetary risk to one that includes the digital landscape as well. With so many potential threats entering the digital hemisphere, cyber risk management must be dynamic to respond to an ever-evolving threat landscape. This is further illustrated by introducing cyber-based regulatory frameworks like NIST CSF, NERC CIP, and CMMC that are required for contractors to work within specific industries.

Cyber risk management is useful also as a utility to mitigate and manage cyber threats that may otherwise go undetected. This includes malware attacks, bad actors, and phishing scams that might penetrate an organization’s cyber assets and wreak havoc. Having an effective cyber risk management system can not only enhance information security but deliver a plan of action, and an incident response protocol should a breach or attack occur, minimizing the impact of a cybercrime event and ensuring the longevity of operations and network security efforts across all business functions. Additionally, by utilizing threat feed databases and properly identifying critical assets that need to be protected and the security controls with which to do so, maintaining the cyberinfrastructure to keep a business optimized can be done seamlessly and efficiently saving time, labor, and stress for security practitioners in the company. Risk registers and threat feeds also hold value as a hive-mind approach to managing risk, identifying new threats before they can affect the organization by pulling new data constantly from a national index.

To the benefit of managing cybersecurity risk, there are multiple gold standard frameworks, some of which are mandatory for contractors in specific industries to follow, much of which have overlapping requirements and cybersecurity risk management best practices. For example, the NIST Cybersecurity Framework and NERC CIP share many commonalities in the handling of cyber information. Both require all critical cyber assets to be categorized and prioritized in the event of a cyber event. While each shares its own specific requirements, satisfying the needs of one cyber framework can set your father on the path of proving compliance across multiple others frameworks as well.

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