Digital risk management: the comprehensive 5 step guide
Digital transformation is inevitable for enterprises looking to harness the advantages of a technology driven infrastructure. Especially as a business entity looks to scale up, there is an urgent need to embrace digitization to stay competitive by today’s standards.
There are several risks associated with executing transformation initiatives. As technology becomes a greater part of an organization, the digital risks associated are also greater.
Ideally, the correct measures to identify, monitor and manage digital risks are responsible for uninterrupted business continuity. Hence, cybersecurity is an irrefutable necessity for a digital enterprise.
The processes outlined in this post will shed light on the importance of vigilant and corrective measures to secure your company’s assets and empower your business with a long-term strategy for transformation.
By embracing digital transformation while safely mitigating risks, we are going to cover 5 steps to effective digital risk management.
But first, it is fundamental to realize the nature of digital risks and how they impact your business objectives now and in the long-term.
An Overview of Digital Risk
Digital risk is often a byproduct of implementing transformation initiatives, referring to the undesired or unexpected consequences that may arise when implementing new technologies. Such risks can hinder your progress towards achieving certain business objectives.
To minimize digital risk and leave no room for error, there are certain measures that can be taken to avoid potential threats and vulnerabilities.
Types of Digital Risk
There are 9 major types of digital risks that impede 3 primary areas of an organization’s business objectives.
To be prepared, you must be fully aware of these areas of impact and thus can implement security initiatives that go hand in hand with your digital transformation journey.
1. Newly implemented process efficiencies
The associated digital risks with implementing new processes for efficiency are as follows:
Cyberattacks: When digital transformation increases the surface for attacks to occur, leaving more opportunities for data breaches.
Cloud transformation: Digital risks that emerge because of deploying new solutions or changes in the cloud architecture.
Data leaks: The unexpected exposure of sensitive data that can accidentally lead to data breaches.
Workforce related: Digital risks that are a byproduct of a talent deficit among the workforce deployed.
2. Newly implemented systems and processes
The digital risks associated with revamping legacy processes and implementing new business models are as follows:
Compliance risks: Ineffective security measures can hinder compliance regulations. Compliance risks may arise form third-party networks or internally.
Third-party risks: Vulnerabilities and cyberthreats introduced through third-party vendors which may hinder the supply chain integrity.
Process automation risks: Digital risks associated with the incorporation of poorly calculated process automation.
3. Customer service efficacy
Digital risks that can hinder customer service operations are as follows:
Business resiliency risk: Digital risks associated with the availability of services post a disruption or cyberattack like data breaches.
Data privacy risk: Risks associated with the exposure of sensitive and private customer data. This form of risk is found in data leaks over social media or third-party networks.
Although the risks outlined above may seem overwhelming for a business embarking on the journey to digital transformation, the effectiveness of cybersecurity is evolving with new ways to address business-critical issues through effective digital risk management.
Digital Risk Management Explained
Digital risk management addresses the need to mitigate digital risks to ensure that digital transformation initiatives are continuous and uninterrupted.
The main objective of digital risk management is to enforce a strict and sustainable approach to prevent digital risk from obstructing enterprise growth or asset management.
Digital risk protection is a result of building a framework to predict all possible threat and vulnerabilities associated with digital risks to implement mitigative measures before or while new technologies are introduced. Established organizations that leverage a comprehensive cyberattack service can scale their protective infrastructure using a Digital Risk Protection Service (DRPS).
As for the existing technology infrastructure, the process of continuously protecting exposed assets from external threats and internal vulnerabilities is digital risk management.
How to Effectively Manage Digital Risks?
Digital risks vary depending on the nature of technology used and the services rendered that separate one business from the other. However, the 9 digital risks outlined above are related to 3 major areas of business where digital transformation initiatives are widely employed.
To tackle digital risks, it is important for you to understand the two major risk perspectives as identified by Gartner as an integrated risk management approach.
The following image summarizes the tactical and strategic business perspectives to foresee risks during digital optimization and digital transformation respectively.
Managing all the 9 categories of digital risk may not be the ideal solution to mitigate risks. Not all digital risks have the same level of impact on business objectives and thus should be further categorized for effective risk monitoring. An efficient approach recommended by our experts is to focus on the critical risks that are threatening the continuity of your business operations.
Data leaks, cyberattack risks, and third-party risks must be a top priority because they lead to the most devastating consequences and can influence all the other categories of digital risk.
Digital Risk Management: The Comprehensive 5-step guide
With chief focus on the major possibilities of digital risk, the following digital risk management framework offers a sustainable and efficient way to tackle associated threats and vulnerabilities.
Step 1: Identify exposed areas & assets
Prior to implementing a digital risk management strategy, all the vulnerabilities should be clearly identified. This can be achieved by establishing a digital footprint of all critical assets being the stakeholders and digital solutions involved.
Digital solutions may include, IT systems, SaaS products, databases and all endpoints of your technology infrastructure.
The stakeholders are basically all users who have access to your IT infrastructure and services including service providers, contractors, customers, and employees.
In many cases, stakeholders are especially vulnerable to threat injections via bugs, malware, email phishing campaigns, etc. By educating the end user about potential threats, your organization can take the first step to risk mitigation.
Once you have identified all assets and areas that are exposed, you can investigate and predict all possible attempts to exploit your company’s digital security.
An attack surface monitoring solution can be deployed to save time while identifying vulnerabilities in your IT infrastructure.
Some popular methods to identify and tackle the likelihoods of exploitation are STRIDE, PASTA, LINDDUN, CVSS, Attack Tress, VAST Modelling, Persona Non-Grata, OCTAVE, Security Cards, hTMM, and Trike.
Step 2: Deploy an Incident Response Plan (IRP)
Strategizing your digital risk management initiatives can empower the organization with improved control over assets and security against threats.
By developing and deploying an Incident Response Plan (IRP), an organization can prepare against any potential breaches in advance.
IRP refers to a detailed guide to respond to any specific cyberattack situation. The possible cyber threats mentioned in step 1 of this guide will help you create an IRP outline.
If your organization does not have experience in strategizing cyber security measures, referring to the MITRE ATT&CK framework can furnish you with fundamental knowledge about varying stages of a cyberattack. With a clearly defined IRP, you can establish the right response system to each stage of an attack scenario.
As a direct consequence of digital transformation, your IT attack surface is prone to expand. Your goal is to minimize the expansion of this attack surface with corrective security measures in place.
To find ways that reduce the attack surface, you require a complete list of all asset vulnerabilities in your IT infrastructure.
To create a detailed vulnerability list, you need to utilize the data from step 1 about exposed assets and analyze potential threats via digital risk assessments.
Estimates indicate that nearly 60% of all data breaches happen through third-party services or networks. Assessing your service provider’s attack surface is pivotal to reducing your organization’s attack surface.
By performing risk assessments for your external vendor network as well as your internal IT infrastructures, you gain practical hacks to reduce the attack surface, which gives less room for cyber threats like data breaches.
Some popular ways to reduce your attack surface are as follows:
– Use multi-factor authentication
– Employ a Zero Trust Architecture
– Tighten up authentication policies
– Network segmentation using multiple firewalls
– Isolate data backups from network access
Step 4: Monitor complete network access
Creating strict policies, regulating permission and access to sensitive data while monitoring network traffic is fundamental to digital risk mitigation.
Digital risk management is not just a way your organization reacts to a cyber threat scenario, but the continuous efforts taken to identify the likelihood of vulnerabilities and solidify your security architecture.
Furnishing the Principles of Least Privilege (PLOP) can limit the access to your network and digital tools only to those who need it. Such policies are often protected by a secure Privileged Access Management (PAM) protocol.
By deploying honeytokens on all access points to your network, you get alerts about any potential exposure to risk before they grow into a serious problem. Armed with a smart defense intelligence, an organization can design and deploy effective digital risk management for each type of cyberattack.
Considering all exposed assets and pertinent vulnerabilities, you can draw a map to incorporate a threat detection solution like the ones mentioned in step 1.
For companies scaling up with social media, extreme focus is required to the various social media channels.
Cyberattacks over social media is growing, and this is due to the widespread inclusion of media channels for enterprise transformation. Threat actors or attackers are aware that legacy defense mechanisms are ineffective in protecting your modernization goals.
To manage digital risks like data breaches, it is always advised to deploy a data leak detection framework. A data leak is classified as any form of unintentional exposure of your digital assets. Once discovered by attackers, these weaknesses in the system can be exploited.
Data leak detection solutions can identify and predict all instances of a potential vulnerability, whether on the surface web or dark web. This empowers organizations with the ability to take imperative action for digital risk management.
The goal is to continuously implement policies and procedures to fasten your security infrastructure via assessing and monitoring risks. Multiple detection systems can be placed to mitigate risks and, in many cases, avoid all possibilities of digital risk.
Consult a Digital Risk Management Expert
If you follow this 5-step guide to digital risk management, you can develop and deploy a security architecture that positions your business for growth. Embracing digital transformation is inevitable, but the ability to protect your data and your people’s data is a choice that must be made.
At Technovert, we are advocates for predictive and corrective security measures that prevent data leaks, breaches and other forms of cyberattacks. Our capabilities for internal and external risk assessments extend towards facilitating real-time evaluation and implementation of top security measures.
And if your organization uses any cloud service provider like AWS, Snowflake or Oracle, our vast network of technology partnerships and solutions are here for you.
1. What is digital risk management?
Digital risk management is a result of building a framework to predict all possible threat and vulnerabilities associated with digital risks to implement mitigative measures before or while new technologies are introduced.
2. How does digital technology reduce business risk?
Digital technology improves process efficiency and harnesses the latest tools to automate strenuous processes. By incorporating digital initiatives, a business can reduce operational costs, improve productivity and influence progressive goal setting.
3. What is digital security risk?
Digital security risk is often a byproduct of implementing transformation initiatives, referring to the undesired or unexpected consequences that may arise when implementing new technologies. Such risks can hinder your progress towards achieving certain business objectives.
Business longevity is met when IT facilitates system changes required to compete and thrive as a leader in industry. I write about digital assets and how businesses can leverage capabilities of AI, cloud and edge computing for strategic transformation.
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