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What Is a Risk Assessment in Cybersecurity?

A risk assessment is part of Cybersecurity that helps identify the different types of threats and the likelihood of those threats occurring. A risk assessment takes data on past attacks, applies analysis methods, and produces an output – an estimate of how likely it is for future attacks to occur.

A key incentive for organizations moving towards adopting risk assessments is that it allows companies to allocate budgets more efficiently.

For example, if a company identifies that it faces a high level of threat activity in the form of cybercriminals looking to exploit vulnerabilities or penetrate their perimeter defenses, this would be considered high levels of risk.

On the flip side, if the company were to identify that their perimeter defenses and architecture best practices were operating at high standards and did not expose them to any significant level of threat actor activity, they would be considered a low-risk profile.

The purpose of conducting a cyber security risk assessment is to help organizations determine whether they have allocated their information technology (IT) budgets in a way that is most likely to prevent loss or damage to their company’s assets. Suppose an organization’s IT funding does not match the level of risk they face. Then this could become very costly for them and leave them vulnerable to attack.

If organizations do not adequately understand and scope what information security risks they pose and the level of exposure, they are likely to face issues such as loss or damage to their information assets, productivity losses due to system downtime, and even security breaches.

Reasons to Perform a Cyber Risk Assessment

Let’s go through the reasons for performing a cyber risk assessment and why you should do so. There are several reasons to conduct a cyber risk assessment, but here are some of the most common:

  • To ascertain your business’s level of security postures against cyber threats and vulnerabilities
  • To understand where you stand as a company on cybersecurity
  • To ensure that your organization is taking the proper security measures
  • To identify areas for improvement in your cyber security posture
  • To help you determine if your company’s information and network assets are at risk and the potential impact on the business should a cyber incident occur
  • To assess where current or future threats may come from (i.e., internal, external, etc.) and what defenses currently exist
  • To provide supporting evidence for making decisions about cybersecurity technology investments
  • To get a baseline assessment for comparing your security posture over time

It is important to note that these are just some of the many reasons you should conduct a cyber risk assessment annually, but they do provide a good starting point.

Who Should Perform a Cyber Risk Assessment?

As always, it’s essential to understand your role and the scope of what you do. Generally speaking, cyber risk assessments are handled by security analysts who conduct regular risk assessments on behalf of senior managers. These could be ongoing risks that need constant management. That can include cross-functional teams with expertise in multiple fields, including IT security.

There are three main roles involved in the assessment process.

  • Management

The first is, of course, management. If you remember, management needs to include security across all business activities and support security initiatives.

  • Assessment

The second role is the analyst or assessment team conducting the assessment. That can seem like a lot of work, but it doesn’t have to be. As we’ll see later, some tools automate this process for you and make it more manageable.

  • Team

The third and final role is the security team to ensure those assessments are carried out correctly. They’ll create the assessment plan and perform checks for compliance, reviewing results and making recommendations. 

After all, a cyber risk assessment isn’t like other types of analysis where you only share them if you get a negative result.

A cyber risk assessment is the process of assessing your current security postures against potential threats and vulnerabilities. It can also be used to determine if there are any glaring opportunities for improvement, all with the aim to avoid serious security incidents that could damage both your information assets and company reputation. GhostWatch is here to help you create a safer and more robust risk profile.