Cybersecurity Risk Assessment: Why You Need It?

It has become increasingly crucial for businesses to prioritize cybersecurity threats and implement effective measures to safeguard against them. Protecting your business from these threats is more important now than ever before. No security mechanism is 100% effective.  Each year, cybersecurity threats grow more prevalent, advanced, and ominous for your business. IBM’s “2023 Cost of a Data Breach Report” explores the financial impact of data breaches. It considers the costs associated with various cybersecurity risks. They are eye-opening:

• The average cost of a data breach reached USD 4.45 million in 2023 which represents a 2.3% increase from the previous years, and an all-time high record. 
• The United States sees the costliest cybersecurity events – the average data breach costs $9.48 million.
• Healthcare organizations have the highest costs associated with data breaches – $10.93 million.
• Customer PII was the costliest — and most common — record compromised.
• The average size of a data breach event – 25,575 records

However, your organization can limit the negative impact of cyber incidents by understanding where the main risks are. How? An extremely important part of overall cybersecurity planning is performing a cybersecurity risk assessment.

What is a cybersecurity risk assessment?  Why is it important?  Why should you perform one?  What are the risk assessment methodologies?

Let’s examine these and other questions to help secure your business.

What is a Cybersecurity Risk Assessment?

Cybersecurity risk assessment is a systematic process used to identify, evaluate, and prioritize potential risks to an organization’s information assets and IT infrastructure. The primary goal is to understand the threats, vulnerabilities, and potential impacts that could compromise the confidentiality, integrity, and availability of information. 

Proper risk assessment is a crucial part of your organization’s overall cybersecurity posture. It helps identify and uncover the main threats and vulnerabilities to your business. The risk assessment also helps shed light on possible attack vectors for business-critical data, crucial business systems, cloud SaaS applications, and other infrastructure that may be critical to your business.

An effective cybersecurity risk assessment will help to achieve the following:

• identify threats that may potentially impact your organization; 
• identify potential vulnerabilities associated with the threats; 
• determine the likelihood of the threat occurrence; 
• analyze the impact of the threat occurrence 
• determine the level of risk against your organization involving a specific attack or vulnerability

Finally, the cybersecurity risk assessment is a proactive measure. Instead of reacting to cyberattacks and other security threats, risk assessment defines areas where your cyber defenses may be weak and need improvement to prevent possible threat events.  

Cybersecurity risk assessment is part of a wider and more comprehensive risk management process described in detail in NIST SP 800-37 Rev. 2 Risk Management Framework for Information Systems and Organizations: A System Life Cycle Approach for Security and Privacy and NIST SP 800-39 Managing Information Security Risk: Organization, Mission, and Information System View. The latter provides a structured approach for managing information security risk and contains core risk assessment guidelines further amplified by NIST SP 800-30 Rev. 1 Guide for Conducting Risk Assessments. NIST 800-30 is considered the golden standard for conducting the risk assessment. 

The aforementioned NIST publications consider risk assessments as an essential part of security best practices. As it helps to identify, rank, and prepare for the potential risks to an organization’s technology infrastructure and data.

Related: How SpinOne Helps You to Meet NIST 800-171 Compliance Requirements

Why you need a Cybersecurity Risk Assessment

The importance of a security risk assessment in cybersecurity cannot be overestimated. Shortly speaking, effective security risk assessments help organizations to:

• save costs;
• create an incident response plan;
• reduce the likelihood of cybersecurity incidents;
• meet regulatory compliance;
• avoid downtime and data loss in case of a security incident

Risk assessments help save costs

Cost savings justify a security risk assessment as nothing else.  Data breaches and noncompliance are costly, with the global average data breach cost estimated as much as USD 4.45 million in 2023. These costs include: 

1. Detection and escalation – activities that allow detecting a breach and reporting the breach to the appropriate personnel (forensic activities, assessment and audit services, crisis management activities, etc.)
2. Notification costs – activities that allow organizations to carry out the appropriate notification activities such as regulatory and other communications.
3. Post-data breach response – processes put in place to help repair any damage caused by the breach (help desk activities, credit reporting/monitoring, legal expenditures, product discounts, fines, etc.)

Risk assessments help create an incident response plan

Security risk assessment is the background for creating an incident response plan. The plan outlines how to recover from cybersecurity events – data breaches, ransomware, data loss, etc. – that may disrupt business operations. Having an incident response plan, specifically one that is well-tested, allows organizations to detect cybersecurity events and respond to them much more quickly. Furthermore, it significantly reduces data breach costs. The cost savings were $1.23 million compared to organizations that lacked a plan or had an untested plan.

Cybersecurity risk assessment with an effective Incident Response Plan lowers costs of cybersecurity events

Risk assessments reduce the likelihood of cyber incidents

Security risk assessments significantly reduce the likelihood of cyber incidents by systematically identifying and addressing potential threats and vulnerabilities. Risk assessments give organizations comprehensive information about the types of attacks they might face, including ransomware, insider incidents, phishing, etc. 

With ever more sophisticated attacks, more complicated infrastructure layouts, and public cloud Software-as-a-Service environments in the mix, performing regular cybersecurity risk assessments provides an opportunity to reevaluate environments based on current risks. 

Furthermore, organizations often experience data leaks or breaches due to inadequate cybersecurity risk assessment or failure to address identified vulnerabilities. A known security vulnerability that is not properly remediated may very well be the one vulnerability an attacker may use to compromise critical, sensitive data.

A risk assessment empowers organizations’ decision-makers to allocate resources properly, allowing for proactive defense measures.

Cybersecurity risk assessment greatly reduces the likelihood of sensitive data breaches and other security incidents.

Risk assessment helps meet regulatory compliance 

Risk assessment is an organization’s obligation under many reputable laws, regulations, and standards, including PCI DSS, GDPR, NIST 800-171, etc. Failure to conduct the risk assessment may result in fines under these regulations. Many of the largest regulatory fines are attributable to the failure to conduct a proper risk assessment, among other things. While these regulations and standards mandate that organizations perform a security risk assessment, they do not specify a particular approach or methodology. Two of the most commonly employed frameworks are the NIST SP 800-30 Guide for Conducting Risk Assessment and ISO 27005:2022 Information Security, Cybersecurity, and Privacy Protection Guidance on managing information security risks.

Cyber Security Risk Assessment Methodology

So far, we have looked at what a cybersecurity risk assessment is exactly and why it is a valuable process for your organization to go through. Let’s see how to perform the risk assessment based on the NIST SP 800-30 Rev. 1 Guide for Conducting Risk Assessments.  See the main steps of the cybersecurity risk assessment process below:

1. Identify all technology assets and data
2. Identify the possible sources of threats
3. Discover your organization’s vulnerabilities
4. Define current cybersecurity measures and what needs to be improved
5. Determine the potential impacts on your business of potential cybersecurity events
6. Determine the risk posed to your business
7. Document your findings

1.  Identify all technology assets and data

To understand your organization’s information security risks, you must first understand your assets — software, hardware, data, systems, and applications that can be targeted. Be sure to include your cloud Software-as-a-Service (SaaS) offerings like G Suite and Office 365.Adetailed asset inventory allows your organization to analyze the availability, criticality, and location of your assets to address risks associated with them.

2.  Identify the possible sources of threats

Knowing your assets is crucial for identifying possible threat sources 

For most enterprises, these are comprised of the following:

1. External threats from attackers, including hackers’ targeted attacks –  hackers are not only looking for vulnerable networks and servers exposed to the Internet but are also carrying out highly targeted attacks.
2. Ransomware and other types of malware – ransomware is arguably one of the most dangerous cybersecurity risks today.  Depending on the amount of data, a ransomware attack can lock your organization completely out of business-critical data and systems in a matter of minutes or hours.  This can leave your business paralyzed from carrying out any activities.  Ransomware attacks are on the rise and are increasingly a tool that attackers use to compromise your data and potentially even steal and leak it.
3. Insider threats – insider  threats are often overlooked. Yet, they may pose a great risk to your organization.  Your own employees can cause cybersecurity events that may seriously hinder business continuity.  Data loss, accidental/intentional deletion, and privilege misuse are only a few examples of how insiders can threaten your business. 

3.  Discover your organization’s vulnerabilities

At the point, when you have performed asset inventory  and analyze the possible risks to your environment, you can put the “theoretical” risks into real-world vulnerability testing.  There may be vulnerabilities that you know of in the environment, however, the purpose of vulnerability testing is not only to verify the risks you know of but uncover those that may be unknown. While you might be aware of certain vulnerabilities in your organization’s environment, the goal of vulnerability testing is not only to confirm these known risks but also to identify any unknown ones.

Many organizations may have an internal security group that can handle vulnerability scanning and testing.  However, help may be needed for smaller organizations or those that may lack the security skills and expertise required to perform their own vulnerability testing.

4. Define current cybersecurity measures and what needs improvement

Based on the results of the vulnerability testing and scans, your organization will gain visibility to known and unknown vulnerabilities and threats in the environment.

With this information, you can then see if the discovered vulnerabilities can be mitigated with additional configuration from a security solution, host, or network standpoint.

An example of the types of questions from the vulnerability testing might include:

• Is there a known vulnerability in current web-facing technologies?  Can it successfully be mitigated with a patch?  If there is no patch available, can services or other alternate configurations be put in place to mitigate this?
• Additional open network ports and services are discovered on both external and internal servers.  Are these needed?  Can they be closed without any other dependencies?
• An application is found to be vulnerable to a known attack.  Can the application be patched or mitigated to reduce the attack surface?

The vulnerability scan will bring to light many issues. No matter how great your current cybersecurity measures are, a thorough vulnerability scan will show an area where improvement is needed in your cybersecurity stance.

5. Determine the potential impacts to your business of potential cybersecurity events

There are varying degrees of cybersecurity events that your cybersecurity risk assessment methodology should take into account.

Obviously, there will be different degrees of impact on your business based on the type of cybersecurity event. Let’s take a look at a potential list of cybersecurity events that will illustrate what we are talking about:

• An end user’s workstation is infected by a “Potentially Unwanted App (PUP)”;
• A low-level employee’s password is compromised
• An end-user becomes a victim of a phishing attack and their workstation may be compromised
• An administrator’s account is hacked;
• Your entire data set is encrypted by a ransomware.

As you can see, all of these events are cybersecurity breaches in some form or fashion.  However, as you work your way down the list, the impact on your business becomes much more severe.

As you work through the various risks and vulnerabilities found, you need to rank the cybersecurity event based on the potential impact on your business.  The high-impact vulnerabilities, if exploited, will be the first vulnerabilities that need to be addressed and remediated.

6. Determine the risk posed to your business

Even though exploited vulnerability may have a large impact on your business, what is the likelihood that it will be exploited?  Certain industries and different types of businesses may have different types of risks compared to others.

As an example, a national government’s network infrastructure would more likely suffer from a “nation-state” attack than a retail business.  Various industries can be targeted based on the type of data they may pose, their infrastructure, security capabilities, and what can be gained from an attack.

A simple formula of overall risk would be the following:

• (Odds of a particular risk happening) X (the impact it poses to your business)

7. Document your findings

Once your organization has gone through the steps of the risk assessment listed above, you should be ready to put all of it in writing, documenting all findings throughout the process into a cybersecurity risk assessment report. The cybersecurity risk assessment report will include the following:

• Inventory of all business-critical systems and data
• The sources of threats that will be most likely to impact your business
• The results of a vulnerability scan across your environment
• Where the current cybersecurity strategy meets the organizations needs and where improvements need to be made
• An impact analysis – Examines the most likely cybersecurity events ranked to determine their impact to your business
• A risk analysis examining the most likely threats and the impact to your business

Once the information has been aggregated into an official report, the report should be shared with management and appropriate business stakeholders.  From the cybersecurity risk assessment, your organization should be in a position to create action items to work on improving the overall security posture.

Cybersecurity risk assessment tools

There are many effective tools that can help organizations to conduct risk assessment. These tools can provide automation of the cybersecurity risk assessment that allows it to be carried out continually rather than as a point-in-time assessment.  Let’s briefly look at the following cybersecurity risk assessment tools:

1. Vulnerability assessment platforms
3. Configuration management solutions
4. Penetration testing tools
5. Security ratings
6. Cloud cybersecurity tools

1.  Vulnerability assessment platform

Vulnerability assessment platforms provide the ability to perform continuous vulnerability scans on your environment. These types of tools can allow you to look for vulnerabilities in real-time.Vulnerability assessment platforms can be housed on-premises or in the cloud to effectively scan your environment for the latest threats known by the tool. New vulnerabilities are pulled down automatically by the assessment platform. In this way, the assessments stay up-to-date.

3.  Configuration management solutions

Configuration management solutions provide a way to constantly scan an environment and apply the desired state to both hosts and applications.

Suppose an insecure configuration is applied or manually configured on a server, client, or in an application. In that case, the configuration management solution will automatically remediate the target to apply the desired “secure” state of the server, client, or application.  This ensures the recommended security settings and configurations are constantly kept in check and that there is no “configuration drift”.

4.  Penetration testing tools

We mentioned penetration testing earlier when considering how vulnerabilities can be discovered as part of your cybersecurity risk assessment. During penetration testing, a “red team” group will generally attempt to penetrate the cybersecurity defenses in a way to discover vulnerabilities.Penetration testing can be carried out by so-called “white hat” hackers who use their talents to help companies discover ways they may be vulnerable. However, there are powerful software packages and automated services that can help provide tools to perform automated penetration testing.

These tools attempt to find vulnerabilities, open ports, services, and other means that are commonly used to compromise your cybersecurity defenses.

5.  Security Ratings

Security ratings are a dynamic, data-driven measure of an organization’s security posture.  They are generally created by a trusted third-party security rating platform.  They provide a quantitative measure of risks in the same way that a credit card score provides an overall view of your credit.

The higher your security rating, the better your overall security posture.  Many organizations today are using security ratings as an effective security tool to better understand their overall security risks.

6.  Cloud cybersecurity risk assessment tools

As more business-critical services and data are moved into cloud environments like G Suite and Office 365, attackers are turning their attention to these environments as targets for new types of attacks.

Organizations today must use an effective cloud cybersecurity solution such as offered by SpinOne.  SpinOne provides a suite of products that allows securing, protecting, and auditing cloud environments such as G Suite and Office 365.

These include the following:

• SpinBackup – automated, secured, backups of your G Suite and Office 365 environment
• SpinSecurity – Automated AI-powered ransomware protection and cybersecurity features for the cloud
• SpinSPM – Automated audits of third-party apps and browser plugins, 24/7 monitoring, security policies, and the ability to blacklist apps or extensions

When it comes to a cybersecurity risk assessment of third-party apps that may have access to your data, SpinAudit provides the ability to assess third-party apps based on a database of behavior metrics that is driven by artificial intelligence.

If an app’s behavior is deemed risky, SpinAudit can effectively block access to your data from risky applications and even prevent them from being installed.  SpinOne’s solution can also detail exactly which data is shared both internally and externally.  This helps to ensure that administrators have visibility of data leak risks in the environment.

SaaS application risk assessment tool

Organizations moving to the cloud can be overwhelmed by security implications and concerns with cloud data and third-party applications. Performing a risk assessment of all cloud applications and browser plugins using manual efforts would be impossible. Use SaaS application risk assessment tools like SpinAudit. It provides an automated way to assess third-party applications’ business, security, and compliance risks. See how SpinAudit helps to automate the risk assessment lifecycle of SaaS applications:

• Continuous risk level analysis of applications – SpinAudit detects when new apps are installed or uninstalled. It automatically reviews the application and identifies apps that have been blocked. Once SpinAudit has blocked an app, its access is revoked any time a user attempts to install it in the cloud SaaS environment.
• User behavior analysis – Determine important cybersecurity information about user behavior, including when they are accessing, what applications they are using, which IP they are connecting from, and geolocation.
• Understand how cloud data is accessed and shared – See which files are accessed and shared with whom. Easily see if the information is shared publicly. Capture events in historical dashboards. Identify sensitive information such as Credit Card Numbers (CCNs).
• Implement security policies – Use granular policies in customizing apps and data audits, and domain audit-related policies. It allows for specific rule scopes, exceptions, and notification settings on a per-rule basis.

Putting it all together

By conducting an effective cybersecurity risk assessment, your organization will be much better prepared to face the threats that lie in the future for your business-critical infrastructure.

Improving your organization’s security posture is a continuous effort that requires diligence, the right tools, and a cybersecurity framework that helps guide you along the way.  By using effective guidelines and tools in your environment, your organization can face both the security challenges of today and those of tomorrow confidently