What is Risk Avoidance?
Risk avoidance in cyber security refers to the strategic measures to prevent potential risks and threats. Unlike risk mitigation, which focuses on minimizing the impact of identified risks, risk avoidance sidesteps the risks altogether. When a company identifies vulnerabilities and potential attack vectors that are too complex to deal with for various reasons, it may implement avoidance strategies to avoid the possible dangers before they can materialize.
Risk avoidance and mitigation are two of four general techniques used to handle risk. Companies must choose an appropriate risk strategy based on their unique resources, objectives, and threats.
4 Ways to Handle Risk
Risk managers generally use these standard practices to deal with risks of various severities:
1. Risk Avoidance
Risk avoidance cybersecurity is a risk approach where mitigation or elimination of the risk is too costly or overwhelming, but the risk is too severe to be accepted. In a case like this, organizations will take the necessary steps to avoid the likelihood of the risk occurring.
Risk avoidance methods may require a business to compromise on specific resources to ensure that they’re doing everything to prevent the threat from occurring.
A simple example would be if an organization avoids opening a branch in a war-torn area due to the apparent risks involved.
2. Risk Acceptance
Accepting risk means living with it rather than removing, avoiding, or reducing it. The trouble is often within the organization’s degree of tolerance if accepted without mitigating measures. Your business should be ready to deal with the consequences when taking on accepted risks.
When accepting a risk, it’s essential to regularly monitor the chance to be aware of any morphing elements that could alter its possibility or impact. You must determine whether accepting the risk remains a wise course of action once it exceeds the limit of your risk appetite.
3. Risk Mitigation
We covered risk avoidance earlier and explained that the disadvantage of the avoidance approach is that it prevents you from taking advantage of opportunities that come with risky actions. For instance, a business that avoids entering into partnerships with third parties significantly reduces the breadth of its productivity and competitive edge.
That’s why mitigation is arguably the most popular method of risk avoidance in risk management strategy. The goal of risk mitigation is to reduce and mitigate the impact of a risk to an acceptable level so that you can profit from it while minimizing its chance and severity. It does not aim to eliminate a risk’s possibility.
4. Risk Transfer
No matter what preparations you make, there will always be residual cybersecurity risks that seep through the cracks. Instead of just living with them, consider investing in cybersecurity insurance from a provider to transfer your risk to a different party.
Insurance is an essential component of any risk mitigation plan. It provides financial protection in the event of a loss and can help your business recover more quickly.
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A Real-World Example of Risk Avoidance
In 2017, China introduced a stringent data localization law that required foreign companies operating in the country to store Chinese user data within China’s borders. This law raised concerns for many multinational corporations, including Apple, as it could expose sensitive user data to Chinese government surveillance and create cyber security risks.
Instead of complying with the data localization law, Apple took a risk-avoidance approach to protect its users’ data and maintain its high-security standards. Rather than storing Chinese user data in local data centers within China, Apple chose to keep all Chinese user data on servers located outside of China, in data centers operated by Apple itself.
In the long run, Apple’s risk avoidance strategy in response to the Chinese data localization law was challenged. In 2018, Apple was mandated by Chinese law to store its iCloud user data within China’s borders.
Tackle Risk Mitigation with Centraleyes
The reality is that implementing a sustainable cyber risk mitigation strategy is simply too much work for most companies to cover all their risks. Sometimes, they will opt for risk avoidance strategies.
Are you looking to understand better how cyber risk impacts your organization? Discover how Centraleyes can save you hundreds of hours and transform your GRC outcomes through simplified onboarding and more visibility into your risk exposure.
Start Getting Value With
Centraleyes for Free
See for yourself how the Centraleyes platform exceeds anything an old GRC
system does and eliminates the need for manual processes and spreadsheets
to give you immediate value and run a full risk assessment in less than 30 days
