Complete guide to digital risk management

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Digital Risk Management

Most companies depend on regular internet access in one way or another, whether it’s to check customers out at a POS system in a store or to help provide online support. Most companies could not even imagine going a single day without internet access. At the same time, this internet access also makes companies more vulnerable. After all, if employees and staff are able to access the organization’s networks and servers from just about anywhere, hackers and criminals can do the same if given the opportunity. This is where digital risk management comes in.

Digital risk management refers to the process of managing and reducing the risk organizations face as they undergo digital transformation. Companies are able to manage their digital risk by adopting new practices and technologies that reduce the chance that data could fall into the wrong hands. Digital risk refers to adverse outcomes that companies might experience if they do not take care of their digital information by prioritizing security and protection. Some of the biggest digital transformation risks include:

  • Cybersecurity Risk: This is the most common type of risk that companies encounter. These are risks that are posed by criminals and hackers that access the company's network without permission, stealing data or corrupting files. 
  • Compliance Risk: These are risks that are unknowingly created by the company's own employees. When employees do not comply with the company's policies, they place the company's data and sensitive information in harm's way. This also refers to regulatory risks that the company might take on.
  • Automation Risk: This type of digital risk refers to processes that are automated. Even though there are software programs that have been created to carry out clerical tasks more quickly, there is always a chance that they might perform them incorrectly. When they do, the automated processes can create a runaway train, leading to cascading errors and the obsolescence of existing controls. 
  • Third-Party Risk: There are plenty of times when companies enter into agreements with third parties because it is beneficial to both organizations. At the same time, introducing a third party into the mix also creates additional risks. 
  • Data Privacy Risk: There is a balance between making data accessible to employees and making it so accessible that anyone can see it. Finding this balancing point can be a challenge.

Digital Risk Management Software

Feeling overwhelmed by the sheer number of digital risks that businesses can face? The good news is that there are software programs that can make the digital risk management process easier. The goal of enterprise risk management software is to provide companies with the tools and information that companies need to plan for, measure, and reduce their risks. While there are plenty of free risk management software options, risk management software should be viewed as an investment in the future of the company. Before making a commitment to one software tool over another, businesses should conduct a risk management software comparison to determine which solution best fits their needs. Many major risk management software solutions include features that facilitate:

  • Avoidance: The goal is to avoid the risk or negative action.
  • Mitigation: The goal is to accept the risk but reduce its action.
  • Transfer: The goal is to transfer the risk away to another entity, like an insurance policy.

Some of the ways that risk management software might accomplish these tasks include:

  • Compliance Management: Ensure that the company follows all necessary rules and regulations.
  • Incident Navigation: Most risk management software examples will have tools for tracking and assessing risks.
  • Reporting: Companies are also going to use risk management software to analyze their risk and take steps to reduce it.

Depending on your company’s industry or clients, you may need to consider specialized risk management software. In highly regulated industries, financial risk management software or insurance risk management software may be more beneficial than a one-size-fits-all approach. 

Looking for your own digital risk management solution? Try Trava to help you assess, mitigate, and transfer your cyber risk.

Digital Risk Assessment

In order for companies to protect themselves, they need to conduct a digital risk assessment. It is helpful to use a digital risk assessment template to review the risks of digital technology and see how they fit into a digital risk management framework. By using a cyber security risk assessment report sample, companies can build a digital risk framework around an information security risk assessment checklist, ensuring that their information is protected from harm. When building an IT risk assessment template, a few of the most important factors to consider include:

  • Identify the Most Critical Business Assets: Take stock of what the organization needs to protect. This includes its data, its people, its peer organizations, and its systems (such as websites, portals, databases, and payment processing systems).
  • Categorize the Threats: When building an information security risk assessment questionnaire, it is critical to identify all possible threats such as viruses, compliance risks, and even natural disasters that could take down the company’s systems.
  • Monitor the Systems: Next, when using the data risk framework, it is important to figure out how the system is going to be monitored. This should include not only the IT department but also what employees can do to monitor the system itself.
  • Test the System: Finally, when completing the risk assessment template, it is also important to test the system. Continually probe the system for weaknesses and adjust to make it stronger.

These are a few of the most important parts of common free IT risk assessment templates. This can go a long way toward building a strong digital risk assessment framework.

Digital Risk Management Jobs

For those who are looking to learn more about digital risk management, there are plenty of jobs available in this sphere as well. It is helpful for people to complete a digital risk management course if they would like to compete for digital risk management jobs. Some of the most common degrees that people in this field have include:

  • Computer science
  • Bachelor of science in business administration
  • Computer engineering
  • Information technology
  • Cyber security

Those who want to strengthen their application might also want to invest in an extra risk management certification such as:

  • Certified in Risk and Information Systems Control (CRISC)
  • Certified in the Governance of Enterprise IT (CGEIT)
  • Project Management Institute Risk Management Professionals (PMIRMP)

The Institute of Risk Management can also provide resources on the best risk management certification, job outlook information, and training. Those who specialize in digital risk management can compete for a number of jobs. These include:

  • Ethical Hacker: Many people who specialize in digital risk management are able to work as ethical hackers, testing various digital systems to look for their weaknesses.
  • Cybersecurity Analyst: Another area in which specialists in digital risk management might work involves cybersecurity. This position involves monitoring the network for signs that someone might be trying to hack the network or upload malware.
  • Financial Risk Management: Other people might specialize in financial risk management, which involves looking at potential financial opportunities and weighing the benefits and drawbacks.
  • Compliance Risk Management: Finally, some professionals in digital risk management might take a look at compliance risks and see if there are potential legal or regulatory risks that the company is taking that could be improved.

These are a few of the top examples of digital risk management in action. This is a rapidly growing field with plenty of opportunities for advancement for those with the right qualifications and experience.

Gartner Digital Risk Management

For those who are looking to learn more about digital risk management, Gartner is one of the largest research companies in this space. Gartner has collected a wide array of information on cyber security, IT risk management, and more. When looking at Gartner’s security research categories, the majority of their content is around:

  • IT security
  • OT security
  • Physical security
  • Supply chain security
  • Product management security
  • Digital risk management security

For businesses that are looking to take care of their digital risk management today, it is important to look at some of the major risks that Gartner has identified, including Gartner cloud risk. Some of the biggest risks include:

  • Business Size: As businesses get larger, it becomes harder to keep them secure.
  • Third Parties: With more third parties delivering digital products and services, many companies are surrendering control of security risks.
  • Growth of Mobile and Social Channels: There are many situations where mobile and social channels are the primary form of digital business today.
  • IoT Vulnerabilities: So much is connected to the internet today that it is hard for companies to keep track of their devices and gateways.

One interesting and particularly pertinent piece of research from Gartner is on  risk-based authentication. There are a number of major steps that companies can take to improve their digital risk management. These include:

  • Tighten Up Access Control Issues: Businesses need to practice a policy that involves the lowest level of clearance required. Nobody should have access to data unless they need it, a practice that can help reduce risk if someone’s credentials are stolen.
  • Continuing Education: All employees must be educated on digital risk management on a regular basis to ensure they know why these policies are important.
  • Two-Factor Authentication: When possible, institute 2FA to reduce the risk of intrusion if someone's credentials are stolen.

These steps can go a long way toward improving the safety of organizations and businesses when it comes to digital risk management.

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