Prasad Sabbineni serves as the Co-Chief Executive Officer at MetricStream.
In today’s digital-first world, the risk of targeted cyberattacks can no longer be ignored. No matter what form the attack takes, no company is safe. If you’re not directly vulnerable, then it’s likely you have third-party affiliates that are.
The World Economic Forum’s Global Risks Report 2023 lists “widespread cybercrime and cyber insecurity” as a top global risk. The price tag for resolving cybercrime is skyrocketing in tandem: Ponemon Institute and IBM put the average cost of a data breach at $4.35 million and a ransomware attack even higher, at $4.54 million—and that doesn’t include the ransom, only the cost of recovery.
Since IT and cyber controls play a critical role in preventing, detecting, and mitigating cyber threats and attacks, the pressure is on for CISOs and CSOs to not only maintain system infrastructure, but proactively guard against future attacks. Cybersecurity teams may face the increasing challenge of identifying critical assets within an organization and their degree of vulnerability, but adding a cyber risk management program may help.
Financial risk professionals will be well familiar with the practice since innovation in the global banking system—including the establishment of online banking—has required us to develop security and compliance controls that can mitigate operational risk around real-time transacting and the protection of party assets and identities. Now, however, digital innovation and transformation beyond the finance sector has made cyber risk management an imperative for every enterprise.
Cybersecurity Vs. Cyber Risk Management
It’s important for leaders and boards to remember that cyber risk management and cybersecurity are not the same, though the two practices are connected.
Cybersecurity teams focus on digital entities: They establish and test processes that protect an organization’s digital assets, systems, devices and data from threats.
Cyber risk management strategies go beyond the digital, encompassing other types of IT-related compliance and regulatory risks—threats from third parties and outside IT vendors, software and hardware insecurities, cloud security, and compliance with frameworks like GDPR, PCI and HIPAA.
Establishing A Cyber Framework And Internal Controls
A complex and layered cyber risk management strategy can show cybersecurity teams where vulnerabilities lie and which controls they must implement to continuously monitor risk while remaining compliant with changing regulations. Creating uniformity among controls and the frameworks they’re applied to is challenging, even for seasoned cyber risk professionals. Multiple cybersecurity frameworks may mean an organization is testing using duplicate or conflicting risk controls, which can cause confusion and create gaps in an organization’s risk posture.
To optimize frameworks, risk teams should dedicate time toward harmonizing their controls more effectively. This is one way that organizations can ensure they’re up to speed on regulations. With regulatory reporting expected to increase in 2023, organizations would benefit on multiple fronts.
Integrating an automated GRC platform that includes control harmonization can help effectively break down silos, strengthen the organization against risk, and simplify and consolidate compliance and reporting activities.
Reporting The Value Of Risk Investments To The Board
According to Gartner, “by 2025, 40% of boards will have a dedicated cybersecurity committee overseen by a qualified board member.” As boards become more “cyber-aware,” they’ll expect CISOs and CSOs to play a pivotal role in developing the organization’s cyber risk culture and to routinely disclose the organization’s cyber risk posture. Quantifying cyber risk can help leaders measure, manage and report risk in currency terms, so that boards and executives better understand their risk exposure and what’s at stake in a monetary value.
Cyber risk management can help organizations meet board requirements for reporting cybersecurity risks by enabling a more regular pulse of risk assessment. Boards that want to understand return on their cyber risk investment will have plenty of data to work with when analyzing the long-term effectiveness of their risk management strategy.
Strengthening Risk Posture For A More Secure Future
By understanding your organization’s strengths and weaknesses against risks, and what strategies and controls are in place to mitigate those risks, your leadership team can map the journey ahead. With a clear knowledge of the processes and assets that hold the highest intrinsic business value and mission criticality, leaders can solidly back their cyber defense strategies and investment decisions.
As executive leadership increasingly demands more of CISOs and CSOs, lean into an automated GRC platform with an interconnected risk management approach to guide, simplify and maximize the efficiency of your organization’s cyber risk strategy.
Incorporating A GRC Platform
The right GRC solution for any business will deliver actionable intelligence quickly and efficiently, with minimal impact to operations. Risk management software evolves with an organization in real time, considering new risk exposures and regulatory changes, so it’s essential that the right GRC framework be purpose-built from the start to align with business objectives. The most advanced programs are easy to configure and personalize with low-code or no-code cloud-based accessibility.
Before considering partners for a technology enabled GRC solution, organizations should perform a self-assessment to determine the risk maturity (or “risk appetite”) of the business. Successful implementation of a GRC program begins with understanding the landscape of risk around you, and by identifying the thresholds and limits you want to set around the risk exposures you have.
Challenges to implementation can include gaps in operations or succession planning; evidence of repeated processes without central ownership; a surplus of data with no aggregator or holistic view of that data; or a lack of communication between front-line business leaders and first and second lines of defense.
A successful GRC approach requires a cultural understanding of the merits of GRC and shared agreement of the company’s most valuable assets. Owners from every business unit within the organization should be encouraged to share data for maximum risk visibility. As you pursue the GRC solution that best fits your business, it’s important to remember that all risk is interconnected; to achieve resiliency and accelerate compliance, collaboration is pivotal. Progress will not happen in silos.
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