Risk Management and Risk Analysis
Risk
Risk is made up of two parts
- The probability of something going wrong
- The negative consequences if it does.
Risk can be hard to spot, however, let alone to prepare for and manage. And, if you’re hit by a consequence that you hadn’t planned for, costs, time, and reputations could be on the line. Similarly, overestimating or overreacting to risks can create panic, and do more harm than good.
Risk Analysis
Risk analysis is the process of estimating the probability and consequence of potential events, scenarios, or outcomes that may affect your objectives, performance, or reputation. Risk analysis helps you to understand the nature, sources, and level of risk, and to provide information for decision-making and risk treatment. Risk analysis can be qualitative, quantitative, or a combination of both, depending on the available data and the context of the risk.
Without a risk analysis to inform your cybersecurity choices, you could waste resources, time, and effort. There’s little point in implementing measures to safeguard against events that are unlikely to occur or won’t impact your company. Likewise, you can overlook or underestimate risks that could cause a big impact. This is why there is a strong need for risk analysis
Risk Management
Risk analysis is a key component of risk management. Risk management is a broader and more comprehensive process that covers all aspects of risk, while risk analysis is a specific and focused process that only covers the estimation of risk. Risk management also requires stakeholder involvement, organizational culture, risk appetite, risk criteria, and risk reporting.
Step involved in Risk Managements
- Asset identification: Identify all assets that could be affected by a cyber threat, such as hardware, software, data, systems, physical facilities, or people.
- Risk assessment/ Analysis: Identify threats and vulnerabilities that could affect each asset and assess the potential impact of each threat.
- Risk treatment: Decide on the most appropriate way to manage each risk.
- Monitoring and review: Continuously monitor the organization’s cyber risk environment and review the effectiveness of the risk treatment measures.
- Other aspects of cybersecurity risk management include:
Security controls: Technical, administrative, or physical measures to protect an organization’s cybersecurity and data.
Incident response plan:A set of instructions that detail how the organization must respond in case of a data breach or cyberattack.