How Do You Evaluate Cybersecurity Risk?

A cyber risk assessment builds a complete picture of the threat environment as it corresponds to business objectives. Risk will usually be calculated using traditional “high, medium, and low” scores.

5 Steps to a Risk Assessment:

1. Define The Scope Of The Risk Assessment

The first step is to identify vulnerable assets in the enterprise to determine the scope of the assessment. A risk assessment of an entire enterprise is a monumental undertaking, and most risk assessments evaluate a specific component of the IT system. It is important to prioritize and scope which systems or applications you will be assessing.

2. Identify Assets And Threats 

a. Identify assets

The next step is to create an inventory of all assets within the scope of the assessment. This would include, but is not limited to: 

• • • Hardware 
    • Software
    • Servers
    • Data
    • Security controls

b. Identify threats

Identify potential threats to your system. Although hackers and data breaches probably come to mind when you think of risks of cybersecurity, the following list includes some less dramatic, but very basic threats to security.

• • • Unauthorized access
    • Data breaches
    • Data loss
    • Denial of service
    • Third-party vendor and supply chain threats.
    • Natural disasters
    • Human error

Now that the threats facing your organization have been identified, you’ll need to assess their impact.

3. Determine Potential Risk Impact

This task involves specifying the likelihood of an identified threat exploiting a vulnerability of an in-scope asset. Factoring in the likelihood of a threat actualizing with the probability of the risk being exploited will give you insight into measuring cyber risk and determining which risks are worth investing in mitigation strategies.

4. Prioritize Risks

Once you’ve scored each risk with a risk score, it is simple to prioritize which risks should be addressed first.

Quantitative vs. qualitative: How to measure cyber risk

Assessments can be either quantitative or qualitative. In a quantitative risk assessment, monetary amounts are assigned to risks, making it easy for board members to calculate risks like they would calculate any other financial risk.
The more commonly used qualitative risk assessments do not involve monetary estimates, and simply rank the risks according to probability and impact. Document your Findings

Bottom Line

Cyber risk assessments are a necessary component of a comprehensive risk management strategy. It is important to avoid a compliance-oriented security approach, which doesn’t address risk from an objective business point of view, and instead relies on standardized security checks.