What Is Information Security Risk Management?

Without any kind of cybersecurity risk management or planning, businesses march headfirst into cyberattacks blind—effectively choosing to think on their feet if their data is breached.

However, waiting for the worst-case scenarios to happen can be extremely costly—both from a reputational and financial perspective. The average cost of a data breach per company, according to IBM, is $4.88 million.

With effective information security risk management, however, firms can avoid such exorbitant loss of customer data and money.

ISRM processes help businesses assess, manage, and remediate risks to their data. In this guide, we’ll explore why ISRM is so important to wider cybersecurity, and how you can get started with your own plans.

What is Information Security Risk Management?

Information security risk management (ISRM) identifies potential risks to sensitive data. It’s a process that businesses follow to spot potential security weaknesses, identify risks that could lead to data leakage, and create strategies to mitigate security incidents from occurring in the future.

ISRM planning doesn’t necessarily involve eradicating risk. Rather, it helps business owners and security personnel to understand potential risks¬—how likely they are to occur, the likely outcomes of these risks—and what can be done to prevent them from causing data breaches. If risks can’t be prevented, an ISRM strategy helps set up measures to reduce damage.

Importance of Risk Management in Information Security

An ISRM is a vital process that helps organizations to secure sensitive information and digital assets, acting as a safety net that can support faster recovery from cyberattacks, mitigate financial loss, and curb operational disruption.

A functional and well-designed risk management strategy helps organizations make decisions surrounding the data they hold and how they process it, while ensuring they meet their expected compliance requirements.

For example, if an organization handles cardholder data, an ISRM strategy will help it adhere to requirements set by the PCI DSS (Payment Card Industry Data Security Standard).

Building strategies through ISRM helps firms secure their assets, reduce financial damage, strengthen customer relationships, and boost their public reputations. Drafting and refreshing ISRM strategies also allows businesses to maintain comprehensive and relevant security measures, operational longevity, and ongoing compliance.

Key Components of Information Security Risk Management

All ISRM processes should focus on key identification, assessment, and treatment strategies – following frameworks, wherever possible, to ensure all bases are covered and that compliance standards are met. To start any ISRM process, for example, we recommend that our clients run vulnerability scanning tools and set up penetration testing to identify potential flaws.

Let’s explore some of the core components of ISRM in a little more detail:

Risk Identification and Assessment

To start the process, security personnel account for all the data assets held within an organization. That might include physical systems, servers, computers, storage devices, networking, applications, and even the data itself.

With this, personnel should always consider which assets are most valuable to their organization—if compromised or leaked, for example, which would cause the most harm?

At this stage, it’s also wise to consider any existing security measures and controls that are already in place—such as those that prevent data threats (like firewalls), and those that help to remediate threats (like data restoration and malware removal).

Processes should also make clear what threat monitoring tools are in use—such as traffic monitoring and intrusion detection—alongside physical controls against damage and theft in the workplace.

At the head of any ISRM process, it’s also important to identify threats and weaknesses that could put sensitive assets at risk. We highly recommend penetration testing, for example, which reveals hidden weaknesses through ethical, controlled hacking.

Are there any glaring or underlying threats or weaknesses that could put your data at risk? Do you have effective access controls, use secure passwords, store data in the cloud, and have physical security on-site if you run your own servers?

It’s also worth noting that external and internal threats should be accounted for—especially considering that as many as eight out of ten companies report coming under attack from the inside:

“83% of organizations reported at least one insider attack in the last year. Even more surprising than this statistic is that organizations that experienced 11-20 insider attacks saw an increase of five times the amount of attacks they did in 2023 — moving from just 4% to 21% in the last 12 months.”

IBM

Beyond this, it’s always worth considering security policies and training that are already in place to ensure staff are up to speed on the importance of asset security. Organizations should ask themselves: Is training effective? Are policies comprehensive enough given the risks and weaknesses we may have found?

Risk Management Frameworks

Security personnel use risk management frameworks to help guide the process of assessing vulnerabilities and ensure that strategies fall in line with data compliance. For example, we’ve supported many clients following the NIST and ISO 31000 frameworks.

The NIST Cybersecurity Framework, or CSF, is a series of highly flexible checks and rules that companies can use to protect their sensitive data from evolving threats. It is frequently used to support decision-making as an extensive knowledge base:

“The CSF does not prescribe how outcomes should be achieved. Rather, it links to online resources that provide additional guidance on practices and controls that could be used to achieve those outcomes.”

NIST

Similarly, ISO 31000 is a framework that guides security personnel through understanding typical risk management principles, how to implement them, and how to review and improve strategies moving forward.

These frameworks can be highly valuable, given the complexity of data management and the variety of risks that are still evolving.

Risk Treatment Strategies

All good ISRM processes outline treatment strategies that suggest how companies can remediate or eliminate weaknesses. However, there may be some cases where risks can only be mitigated—and, therefore, an ISRM plan should outline how the likelihood of data loss can be reduced.

At this stage, an ISRM plan should also outline which processes and practices should be changed or regularly reviewed to ensure data is safe from increasingly sophisticated attacks and vectors.

What’s more, a detailed ISRM process should also break down what support organizations need from third parties—for example, through off-site penetration testing, or cyber insurance coverage.

Ultimately, a company’s ISRM plan should lay out its understanding and acceptance of risks to its data. There may, unfortunately, always be cases where data is at risk—and in which case, an ISRM should identify how such risks are to be managed if they cannot be fully removed.

Benefits of Information Security Risk Management

Effective information security risk management can help businesses adhere to legal compliance and regulations, support more reliable operational continuity, improve data security, uphold public reputation, and reduce financial loss. We help our clients achieve all of the above, too, with flexible cybersecurity planning, analysis, and recommendations.

Let’s explore these benefits in more detail. With an effective ISRM process, businesses are:

• More likely to be compliant and meet regulatory requirements easier, thanks to following frameworks like ISO 31000 that outline key risk assessment strategies based on crucial data security regulations.
• More robust in the face of disruptive events, with clear procedures in place on what to do if operations are locked down for extended periods.
• More confident in securing data, with clear insights into weaknesses and flaws that could cause data breaches—and which are planned for and often remediated with more effective controls.
• Better trusted by the public and stakeholders, with customers clear on how they approach data weaknesses, respect their sensitive information, and bounce back from cyberattacks.
• Less likely to lose money from cyberattacks, with efficient recovery strategies in place to mitigate attack coverage and incident length, and prevention strategies that stop costly attacks from taking hold, period.

Challenges and Best Practices for Effective Information Security Risk Management

Some of the biggest challenges in effective ISRM include keeping measures up to date with the latest threats, ensuring all personnel receive relevant training and advice, and mitigating human errors made during risk assessment and threat protection.

Strategists can start to overcome these challenges by delegating task ownership to different parties, engaging the support of external cybersecurity experts, clearly communicating decisions made and strategies designed, and establishing regular risk monitoring and reviews of the process.

After all, like the threats to your data, you must ensure your security posture evolves over time.

Here’s a quick run-through of these best practices and why they’re important. We recommend that businesses:

• Delegate ownership to different parties during the ISRM drafting process, so that building and reviewing controls, vulnerabilities, and remediation factors run as smoothly as possible. For example, you might delegate financial data risks to the department that specifically handles and processes payments.
• Enlist the help of cybersecurity professionals to find hidden weaknesses and make recommendations to strengthen security postures. While it’s possible to learn frameworks, assess risks, and implement controls yourself, hiring a team such as VikingCloud’s to test your data risks thoroughly is much more efficient and cost-effective.
• Clearly communicate decisions made within ISRM practices so that employees and stakeholders understand what’s at risk, and what parts individuals have to play in protection and remediation in the future. Outlining the potential risks to your data across your organization can improve individual understanding, reduce human error, support training, and strengthen personal accountability.
• Continuously review and improve risk analyses in the months and years ahead. Risks will always change and evolve, whether because of shifts in your organization or the needs of your customers, or thanks to new and emerging cyber threats. Regardless, drafting and implementing an ISRM process is not a one-and-done deal—and there should be regular checkpoints at which personnel review strategies to ensure they’re still relevant and achievable.

Getting started with your own ISRM process can seem like a daunting task. After all, accounting for all potential risks within your organization is likely to cover plenty of administrative ground and buy-in from departments and stakeholders.

At VikingCloud, however, we help soothe ISRM headaches with comprehensive testing, scanning, and cybersecurity advice you can rely on to keep your data safe. To find out more, contact our team today for a free consultation.