Whether you are an SMB looking for advice as to where to start with risk management or an IT professional looking to mature your security program and mitigation strategy, read on to discover how you can help protect your organization from potential security threats with the top 4 risk mitigation strategies brought to you by Centraleyes.
According to a recent study by IBM and the Ponemon Institute, the average cost of a data breach is $4.35 million. This underscores the importance of risk mitigation efforts in today’s business environment. In addition, the study found that the most costly breaches were those caused by malicious attacks, followed by system glitches and human error. To mitigate these risks, organizations must implement a comprehensive approach that includes proactive measures such as security awareness training, regular vulnerability assessments, and incident response planning. Furthermore, with the increasing prevalence of remote work due to the COVID-19 pandemic, companies must also focus on securing their remote workforce and devices. By taking a proactive and comprehensive approach to risk mitigation, organizations can significantly reduce the risk and potential cost of a breach.
In a recent survey by ERM, 59% of organizations believe the number and complexity of business risks are only increasing. Another finding in the survey is that 68% of organizations indicate they have recently experienced an operational surprise due to a risk they did not adequately anticipate.
As a business owner or manager, it’s essential to understand that risks are inevitable. No matter how well you plan and execute, there’s always a chance that something will go wrong. However, with the right techniques for risk mitigation, you can minimize the likelihood of negative outcomes and protect your business. Read on as we explore some practical risk management techniques and discuss how they can help you protect your business.
What is the Meaning of Risk Mitigation?
Risk mitigation is the process of identifying potential risks, assessing their business impact, and creating a plan to mitigate their damage to the company. Well-planned risk mitigation strategies can make the difference between taking a particular event in stride or going out of business because of it.
4 Types of Risk Mitigation Techniques
How do you handle risks? What strategy do you implement for risk mitigation? Risk management strategies generally use one of these 4 standard approaches to deal with risks of various severities:
- Avoid the risk by eliminating any vulnerable activities
- Accept the risk
- Mitigate the risk by implementing security controls
- Transfer the risk to an external party, i.e. insurance
Critical and high risks factors should rarely be accepted and are usually not well-suited to avoidance or transfer without significant changes to your business operations. That leaves mitigation as the most likely choice for medium to high-severity risks.
- Avoidance
Risk Avoidance 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 at all. Avoidance may require a business to compromise on certain resources to ensure that they’re doing everything to prevent the risk from occurring.
A simple example of this would be if an organization avoids opening a branch in a war zone due to the significant risks involved. Avoidance has the disadvantage of losing out on opportunities that can be gained by engaging in the activities that impose the risk; in some cases, however, this is the best business choice.
- Acceptance
Risk acceptance is a decision to accept risk instead of eliminating, avoiding, or mitigating it. Accepting the recognized risk without taking any mitigation measures usually means that the risk is within the risk tolerance level of the organization. When accepting risk, your organization should be prepared to live with the consequences.
When studying the concept of risk acceptance, two concepts need to be defined: tolerability and acceptability.
Tolerability refers to the willingness to live with risk to ensure certain benefits so long that it will be adequately controlled. In this sense, tolerating a risk means that we do not consider it insignificant or something that we could or should ignore, but rather something that we should keep under review and reduce further if we can.
Acceptability, on the other hand, means that for the business values and missions as they stand, we are prepared to take and accept the risk as is.
Risks are accepted in these two scenarios:
- risks that have minimal impact and don’t justify a full-blown mitigation effort, or risks for which insurance and due diligence are enough. These usually fall under the “acceptable” category.
- For risks that are set to be mitigated but where mitigation cannot be performed instantly, risks are accepted for limited periods during which mitigation is undertaken. These usually fall under the “tolerable” category.
With risk acceptance, it’s crucial to continuously monitor the risk to keep your eyes open to any shifting factors that may change the likelihood or impact of its occurrence. Once the risk crosses the threshold of your risk appetite, you’ll need to assess whether accepting the risk continues to be a smart move.
- Mitigation
In the previous section, we discussed risk avoidance. When choosing an avoidance strategy, you’ll want to completely remove the probability of risk from occurring. As we mentioned, the downside of this method is losing out on opportunities that can be gained by engaging in the activities that impose the risk. For example, a company that avoids engaging with third-party partnerships is severely limiting the scope of its productivity and competitive edge.
That’s why mitigation is such a popular strategy. Risk mitigation is not about completely removing the probability of a risk, but about reducing and mitigating its impact to an acceptable level so that you can reap the benefits of the risk while keeping its likelihood and severity to a minimum level.
Risk mitigation flows naturally from risk acceptance. You identify a risk scenario, determine how it may adversely affect your organization, and develop a strategy to control its impact. With risk mitigation, you are not avoiding risk, but accepting it after certain criteria have been met.
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Practical Risk Mitigation Steps
Risk is an inherent part of any business or individual activity. There’s always a chance that something unexpected could happen and derail your plans. This is why it’s important to have a risk mitigation plan in place – a structured approach to identify, assess, and manage potential risks before they turn into major issues.
There are several practical techniques for proactive risk mitigation planning. These include:
- Regularly updating and patching your software and hardware
- Implementing multi-factor authentication and implementing access control strategies
- Adhering to a security framework that ensures no security gaps are overlooked
- Conducting regular cybersecurity training for employees
- Data backups and data loss prevention planning
- Business continuity planning or incident response
Even with the best risk mitigation measures in place, there’s always a chance that something will go wrong. That’s why it’s essential to have a business continuity plan in place. A business continuity plan outlines the steps you’ll take to keep your business running in the event of a disruption.
When developing your business continuity plan, consider the different scenarios that could impact your business. This could include natural disasters, power outages, or cyber-attacks. Your plan should outline the steps you’ll take to minimize the impact of these disruptions and keep your business running.
To prepare for a worst-case scenario, risk transfer can be a practical strategy to get you through a risk occurrence in one piece. Read on to learn more about that in the next section.
- 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.
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.
Tackle Risk Mitigation with Centraleyes
The reality is that implementing a sustainable cyber risk mitigation strategy is simply too much work for most companies. Existing legacy solutions are too strenuous, time-consuming, or expensive to implement.
That’s where Centraleyes enters the scene as a next-generation cyber risk & compliance management platform that empowers you to achieve your GRC goals through the power of automation, risk-based data, and mitigation strategies.
Are you looking to better understand how cyber risk impacts your organization? Discover how Centraleyes can save you hundreds of hours and transform your GRC outcomes through simplified onboarding, more visibility into your risk exposure, and automated mitigation strategies.
Book a demo today and see what the next generation of risk management looks like with Centraleyes.
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
