Rapid technological advancement and rising global connectivity are reshaping how the world functions. From higher productivity to improved customer satisfaction, technology has played a critical role in the growth of businesses worldwide. However, the consequential bad news is that technological advancements have made organizations increasingly vulnerable to digital risks. However, this does not mean that businesses must compromise on growth and advancement for the sake of security. 

Organizations that understand how to detect threats and include preventative security measures and controls, as well as proactive solutions and thorough strategies, may better meet the security problems they face in modern digital environments. Let’s discuss the different types of digital risks you should look for and how to use this information to get positive ROI.

Types of digital risks

Digital risks are increasing in the business world due to the rapid adoption of new disruptive technologies. These risks are seen in various industries and are more pervasive than cybersecurity risks. On a broader scale, digital risks can be classified into physical, technical, and administrative risks. 

The following risks are the most prevalent in today’s digital world and should be treated as top priorities to mitigate for your business:

• Cybersecurity risk: Cyber attacks continue to evolve as businesses become more technology-driven. Attacks like ransomware, DDoS, etc., can disrupt the normalcy of any business.
• Data privacy risk: As we move forward to a knowledge-based economy, data has become the most valuable commodity in the world. This has resulted in hackers targeting critical business data and misusing it for personal gain.
• Compliance risk: Businesses must adhere to various regulations regarding data privacy, cybersecurity, organizational standards of practice, etc. Any violation can attract heavy fines and penalties for a business.
• Third-party risk: When you outsource certain services to third parties, it might compromise the security of your IT infrastructure. For instance, a software tool you develop with an external vendor may introduce vulnerabilities to your otherwise intact digital environment.
• Resiliency risk: This concerns the ability of a business to bounce back and continue operations after an unexpected disaster.
• Risks due to human error: In 2021, 85% of data breaches involved some human element.* Whether it’s falling for phishing scams, credential stuffing, or misusing work devices, human errors can be quite costly for organizations if they go unchecked.
• Automation risks: While automation is reshaping the tech industry for the better, it could also give rise to various risks such as compatibility risks, governance risks, and more.
• Cloud storage risks: The flexibility, ease of use, and affordability offered by the cloud make it one of the most popular options for backup and storage. However, the cloud is also prone to various risks such as lack of control over data, data leakage, data privacy, shared servers, and more.

Why risk assessment is critical in managing digital risks

The best way to manage your digital risks is by regularly performing comprehensive security risk assessments. After all, how would you know your current vulnerabilities or gaps and where your biggest security challenges lie without an “under the skin” examination? 

With a risk assessment, you can measure your security posture against various internal and digital threats and determine how equipped you are to deal with these risks. When you perform a security risk assessment, you can proactively:

• Identify vulnerabilities: A risk assessment helps you identify which part of your digital environment is relatively weak against various security threats. You can identify which systems will likely be targeted by attackers and incorporate measures to strengthen these systems. Without the information presented by your risk assessment report, you don’t stand much chance of improving your digital security posture against various vulnerabilities.
• Review and bolster security controls: In most cases, security incidents occur due to a lack of controls in the process. For instance, without proper cybersecurity awareness training and best practices training, employees are unlikely to follow security protocols independently, which could result in losses due to human errors. You can upgrade your securities and incorporate preventive measures against various risks based on the risk assessment.
• Track and quantify risks: To effectively manage various risks, you need to know their effect on your business. With a risk assessment, you can quantify these risks by identifying the potential losses posed by various threats. This helps you incorporate necessary risk-mitigation strategies to prevent exposure.

The value of risk assessment

IT and security budgets are often challenging to explain to management. Everyone understands the consequences of not investing in the correct security measures. However, putting an exact ROI figure on security investments isn’t easy or straightforward. The value of risk assessment is based on how you choose to act with the information you get from these reports.

In this scenario, the real question is – what is the cost of not making this investment? Let us consider a major data breach for example. It is always about what you stand to lose in the aftermath of a breach. A breach can result in unrecoverable financial losses and reputational damage if your business deals with valuable customer data. Moreover, this might also result in regulatory non-compliance and attract heavy penalties from various regulators. Reviving a business after a major disaster can be almost impossible in such cases.

Here, the cost of investment in security solutions and cyber insurance is negligible since it concerns the business’s survival. You may not be able to measure the exact ROI of the airbags in your car, but that does not mean that your survival is not dependent on them. Similarly, the information and insights gained from routine risk analyses are critical to your business’s operation, resilience posture, and long-term success.

Assess your risks the right way

Monitoring and managing your digital security risks is a continuous process that must be done regularly and should be a part of your ongoing operational strategy. 

Contact us today to perform a complete risk assessment of your digital infrastructure to help you build a resilient security posture against various threats.