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Data risk management framework, assessment, and best practices

Protect your business with an integrated cyber risk management strategy.

The internet has transformed the way many companies do business. Technology has made things easier. Digital technology has made it more efficient for businesses to store data, share data, and complete their daily business operations. At the same time, this places additional responsibility on businesses to make sure they take care of their data. Who hasn’t seen a headline or two about major data breaches that have taken place over the past several years? For example, Equifax suffered one of the biggest data breaches in history in 2017, placing the confidential data of millions of people at risk. For this reason, data risk management is critical.

If you’re left wondering, “What is data risk?,” Deloitte explains: Data risk is the exposure to loss of value or reputation caused by issues or limitations of an organization's ability to acquire, store, transform, move, and use its data assets. Businesses can assume many risks with data management, which is why it’s important for businesses to conduct risk assessment and employ data management practices on a regular basis. When it comes to database risk management, some of the most common missteps businesses make include:

For business owners, it’s important to talk about data risk management and how organizations can protect their confidential information from harm. Data risk management is a controlled process. An organization follows this process when they acquire, store, and use their data at every step. The goal is to reduce data risk to as minimal of an issue as possible. All organizations should have a clear plan when it comes to data collection risk management so that they can protect not only their data but the confidential information of their business partners and clients as well.

Secure for the known, insure for the unknown

Your destination may be achieving compliance in industry certifications such as SOC2 or ISO27001, but it doesn’t stop there. With Trava, our modern tools can help you bridge the gap between where you are and where you want to be by giving you the control to assess your risk, repair the most vulnerable areas, and transfer risk through insurance.

Data Risk Management Framework

There are several important tasks that should be included in a data risk management framework. With an increasing number of data risks and controls, there is no single optimal model for every business. In reality, businesses need to adjust their plans and frameworks often in order to keep up with best practices and to incorporate new technology that can keep their data better protected.

One key step in building a data risk framework is to develop a data risk taxonomy. This is one of the most important tools in risk management data collection. Data risk taxonomy refers to the process of categorizing risk types. For example, when looking at data risk management, some threats come from hackers and criminals; however, natural disasters must also be considered as part of a data risk management strategy. By taking a closer look at these data risks, your company’s enterprise data risk management can become more effective.

In general, data risk management frameworks should include:

Data Risk Assessment

Companies should carry out data risk assessments on a regular basis. For some companies, this could be monthly or even more often. A data risk assessment, a way for companies to take stock of the risks that threaten their data, is a crucial component of any data security plan. With a regular risk assessment, companies can pivot and respond appropriately to threats as they happen—and there’s less of a chance that cyber criminals will obtain confidential information. 

Every company should come up with their own custom data risk assessment that touches on the tools, workflows, and software of their employees and clients. If you’re looking for data risk assessment examples, the National Institute of Standards and Technology (NIST) offers a robust list of resources, while other cyber risk management companies like Trava offer vulnerability and data risk assessments.

According to NIST, steps that companies should take when building a data risk assessment template or a data risk assessment checklist include:

By completing a data risk assessment pre-screening questionnaire on a regular basis, along with a data risk assessment questionnaire, companies can ensure that they are prepared for just about anything.

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Data Security Risks

The number of data security risks is nearly endless as technology and cyber criminals become more advanced. Only by making data risk management a top priority can businesses be prepared to respond appropriately. Some of the biggest threats include:

Data risk management has to be able to cope with all of these risks. Data risk analysis should include these threats so that companies can be prepared to deal with them appropriately.

Enterprise Risk Management

Data governance risk and controls are usually tailored to meet the individual needs of an organization, particularly for enterprise-level risk management. When looking at data governance and data governance risks, enterprise risk management is different in a number of ways. Some of the key differences include:

These are just a few of the biggest ways that enterprise risk management differs from traditional SMB data risk management. All parts of the enterprise must work together to effectively handle risk management.

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