This ebook contains five actionable steps that will put you well on your way to establishing an effective third-party risk management (TPRM) program.
Information risk management is defined as the policies, procedures, and technology an organization adopts to reduce the threats, vulnerabilities, and consequences that could arise if data is not protected. Common threats include ransomware, data breach, denial of service attacks, supply chain hacks, and more – many of which exploit existing vulnerabilities in your organization’s IT environment. These risks must be accounted for in your information risk management plan.
In this article, we’ll show you how the classic equation for risk can help you develop your information risk management strategy to prioritize risk reduction efforts and improve your organization’s security posture – plus best practices for doing so.
Understanding the IT Risk Equation
As mentioned in our working definition, information risk management examines this classic equation for risk:
Threat x Vulnerability x Consequence
Threat is inherent in information risk management. Threats can manifest within your organization (often due to human error or malicious behavior) and from third parties (such as vendors and partners).
Vulnerability denotes the gaps in your security program. Let’s say you have a sensitive document and you put it in a safe, in a locked building, protected by guards; you likely feel confident that the document isn’t vulnerable to many threats. Now, if that same document was online in an open network where your organization stores all its data, it’s easy to see how the safety of the document is compromised. The moral of this story is to understand not only what vulnerabilities exist in your IT infrastructure and that of your third parties, but also how those vulnerabilities can be exploited. Once you parse through this information, you’ll gain a clearer idea of how to address your overall risk.
Consequence represents the harm caused to an organization by a cyberattack. An important element to consider here is the value of the information you’re trying to protect — something which can vary tremendously. For example, intellectual property data or pricing information may be of value to your organization. But data such as personally identifiable information (PII) can also hold value because of the legal requirements to protect it. When determining risk, it’s important to ask what might happen if that data is compromised.
Best Practices For Properly Managing Information Risk
Knowing what information risk management is and what it entails, as outlined by the risk equation, is the first step to managing risk. From here you can establish a clear strategy for information security and risk management.
A key part of that strategy is understanding the true scope of your expanding digital environment – on-premises, in the cloud, across geographies, business units, and remote locations. After all, you can’t secure what you can’t see. Instead of undertaking a time-consuming inventory and manual risk assessment of your IT infrastructure, use an attack surface analytics tool to discover the location of your digital assets quickly and automatically – and the corresponding cyber risk associated with each of those assets.
Then, use BitSight for Security Performance Management to continuously monitor for emerging vulnerabilities. BitSight automatically reveals the vulnerabilities facing your organization in near real-time, identifying and alerting you to misconfigured software, unpatched systems, open ports, and anomalies in user behavior. It also ranks areas of disproportionate risk – so you can take rapid action to allocate security resources where they are needed most.
BitSight can also be used to measure the effectiveness of your information risk management strategy. With a tool like BitSight Control Insights (part of BitSight for Security Performance Management), you can continuously measure the effectiveness of your security controls according to best practices frameworks like CIS Controls and/or safeguards. And with BitSight Security Ratings, you’ll get a data-driven measurement of your enterprise-wide security posture. Findings are presented as a numerical score (like a credit score), making it easy to convey security risks and your organization’s cyber readiness in terms that all stakeholders can understand.
Finally, use BitSight for Third-Party Risk Management to mitigate supply chain risk by measuring, verifying, and continuously monitoring your vendors’ security postures – without relying on manual, subjective, point-in-time assessments. If a vendor’s security performance drops below a pre-agreed risk threshold, you’ll receive automatic alerts and insights that you can share with your vendors, making third-party risk management a more collaborative process.
Everyone is Responsible
Information risk management is not something that lies with IT or security teams; it’s an imperative that the whole organization must own.
Fortunately, with the comprehensive insights that BitSight delivers, you can automatically measure and monitor enterprise-wide and third-party security performance. Armed with these data-driven insights, it becomes much easier for the C-suite, board of directors, and cross-functional business leaders to reach agreement on where to invest your limited budget, time, and resources to remediate and mitigate the risk of cybersecurity threats, risks, and consequences.