Risk Assessment

Risk assessment is a term used to describe the overall process or method where you:

  • Identify hazards and risk factors that have the potential to cause harm (hazard identification).
  • Analyze and evaluate the risk associated with that hazard (risk analysis, and risk evaluation).
  • Determine appropriate ways to eliminate the hazard, or control the risk when the hazard cannot be eliminated (risk control).

Now that we understand the importance of cybersecurity risk assessment and the people responsible for performing them, it is crucial to understand the process itself. Before commencing on a cybersecurity risk assessment, an organization should first audit the IT infrastructure and data it is securing. A data audit, for example, identifies the data a business handles and its value. The following questions can guide a data audit:

  1. What type of data does the business collect?
  2. Does the organization use which options to store the data?
  3. What processes does the company use to secure the data and document it?
  4. What is the validity of the data?

Once the data audit and IT assets audit are complete, a business must define the parameters that will guide the risk assessments. The following guidelines can assist in determining appropriate parameters:

  1. Purpose of the risk assessment
  2. The scope of the cybersecurity risk assessment
  3. Particular constraints or priorities that can impact the risk assessment process
  4. The individuals responsible for providing the information needed to perform the risk assessment
  5. The risk model a business should use to assess risks

The parameters ensure that a cybersecurity risk assessment meets all the objectives. More importantly, they guide the process to ascertain in the evaluation of all critical assets. These can include information systems and data storage facilities.

The process cannot be complete without performing the risk assessment itself. National Institute of Standards and Technology (NIST) recommends a risk assessment model consisting of six main steps. They are as indicated below. [Source]

Risk assessment steps

1. Characterize the System (Process, Function, or Application)

Characterizing the system will help you determine the viable threats. 

2. Identify Threats

There are some basic threats that are going to be in every risk assessment, however depending on the system, additional threats could be included. 

3. Determine Inherent Risk & Impact

This step is done without considering your control environment. Factoring in how you characterized the system, you determine the impact to your organization if the threat was exercised.

4. Analyze the Control Environment

You typically need to look at several categories of information to adequately assess your control environment. Ultimately, you want to identify threat prevention, mitigation, detection, or compensating controls and their relationship to identified threats.

5. Determine a Likelihood Rating

Now, you need to determine the likelihood of the given exploit taking into account the control environment that your organization has in place.

6. Calculate your Risk Rating

Even though there is a ton of information and work that goes into determining your risk rating, it all comes down to a simple equation:

Impact (if exploited) * Likelihood (of exploit in the assessed control environment) = Risk Rating [Source]

Whether you are a small business or multinational enterprise information risk management is at the heart of cybersecurity. These processes help establish rules and guidelines that provide answers to what threats and vulnerabilities can cause financial and reputational damage to your business and how they are mitigated.

Importance of risk assessment

  • Reduced long-term costs: Cybersecurity risk assessments enable an organization to detect and analyze existing risks. This way, it can adopt effective solutions to mitigate them. Mitigating risks prevent cyber-attacks and the resulting damages and financial implications.
  • An organization achieves an improved self-awareness: Risk assessments identify weaknesses within an organization’s cyber defense. It also identifies vulnerable systems and ineffective cybersecurity policies. By doing so, a business can plan for areas requiring additional investments. It can further use the results of the assessments to create stronger cybersecurity programs leading to an improved security posture
  • Enhanced visibility and communication: A cybersecurity risk assessment requires the input of all departments. Therefore it fosters communication between all departments and the IS department. Subsequently, IT staff realizes increased visibility of the available IT assets, data, and endpoint devices. The importance of such visibility is great as it leads to closer monitoring and better risk management efforts
  • Prevents cybersecurity incidences and data breaches: Identifying security risks before criminals can exploit them prevents breaches. Risk assessment entails identifying risks with more severe impacts. This risk identification will pave the way for the implementation of adequate security controls.
  • Legal requirements: Many regulations and international standards require businesses to carry out frequent risk assessments. Risk assessments make sure that they observe effective risk management programs to safeguard customer and employee data. Cybersecurity risk assessments allow organizations to meet their regulatory obligations. [Source]

Source code scan

Source code analysis tools, also referred to as Static Application Security Testing (SAST) Tools, are designed to analyze source code or compiled versions of code to help find security flaws.

Some tools are starting to move into the IDE. For the types of problems that can be detected during the software development phase itself, this is a powerful phase within the development life cycle to employ such tools, as it provides immediate feedback to the developer on issues they might be introducing into the code during code development itself. This immediate feedback is very useful, especially when compared to finding vulnerabilities much later in the development cycle. Read more

3rd party risk assessment

A third-party risk assessment is an analysis of vendor risk posed by an organization’s third-party relationships along the entire supply chain, including vendors, service providers, and suppliers. Risks to be considered include security risk, business continuity risk, privacy risk, and reputational risk.

 Third-party risk assessments are a crucial part of every third-party risk management program (TPRM). They may be conducted in-house or by an independent safety or cybersecurity professional.

 Not every entity with whom your organization does business will need to undergo the complete third-party risk management process. Some may not have access to your systems, networks, or sensitive information, and may be deemed to pose little or no risk to your business or its information security. [Source]

The assessor will probably use a risk management framework from the International Organization for Standardization (ISO) or the National Institute for Standards and Technology (NIST) to analyze your third-party risk management program.

Steps in the third-party risk assessment process include:

Identifying potential risks posed by all your third-party relationships
Classifying vendors according to their access to your systems, networks, and data
Reviewing service level agreements (SLAs) to ensure that vendors perform as expected
Determining compliance requirements for your organization including which regulations and standards they and you must meet
Assessing risk for individual vendors according to their importance to your organization, the sensitivity of the information each handles, and access to your digital network
Querying vendors with risk management questionnaires
Auditing select vendors according to their answers to the questionnaire, possibly with on-site visits
Continuously monitoring for changes in their environment and yours as well as changes in regulations and industry standards. [Source]

Penetration Test

A penetration test, also known as a pen test, is a simulated cyber attack against your computer system to check for exploitable vulnerabilities. In the context of web application security, penetration testing is commonly used to augment a web application firewall (WAF).


1. Planning and reconnaissance
The first stage involves:

Defining the scope and goals of a test, including the systems to be addressed and the testing methods to be used.

Gathering intelligence (e.g., network and domain names, mail server) to better understand how a target works and its potential vulnerabilities.

2. Scanning
The next step is to understand how the target application will respond to various intrusion attempts. This is typically done using:

Static analysis – Inspecting an application’s code to estimate the way it behaves while running. These tools can scan the entirety of the code in a single pass.

Dynamic analysis – Inspecting an application’s code in a running state. This is a more practical way of scanning, as it provides a real-time view into an application’s performance.

3. Gaining Access
This stage uses web application attacks, such as cross-site scripting, SQL injection and backdoors, to uncover a target’s vulnerabilities. Testers then try and exploit these vulnerabilities, typically by escalating privileges, stealing data, intercepting traffic, etc., to understand the damage they can cause.

4. Maintaining access
The goal of this stage is to see if the vulnerability can be used to achieve a persistent presence in the exploited system— long enough for a bad actor to gain in-depth access. The idea is to imitate advanced persistent threats, which often remain in a system for months in order to steal an organization’s most sensitive data.

5. Analysis
The results of the penetration test are then compiled into a report detailing:

Specific vulnerabilities that were exploited

Sensitive data that was accessed

The amount of time the pen tester was able to remain in the system undetected

The risk landscape is changing fast. Every day’s headlines bring new reminders that the future is on its way, and sometimes it feels like new risks and response strategies are around every corner. The outlines of new opportunities and new challenges for risk leaders—indeed, all organizational leaders—are already visible.

Risk assessment is largely inward focused as compared to being forward-looking and externally focused. Detailed analysis of competitor strategies/ benchmarking and scenario planning are not widely used. Organizations presently have begun evaluating the “unknowns” by identifying exposure and correlation between external trends and risks that could eventually result in a disastrous impact on their own survival.  Some organizations use situation planning and stress testing broadly in their risk assessments to objectively evaluate impact because of emerging risks.

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