Cyber security is an area of risk management where a person or organization can’t be too cautious in mitigating possible exposures. In this current digital age, many businesses and individuals are increasingly reliant on having data and information stored and carried through cyberspace. This data and information can make it anywhere in the world in just a few seconds, allowing for immediate financial transactions and information sharing, which can be both positive and negative for the parties that have money or data at stake.
As convenient as online data transfer and storage is for the people and businesses that utilize it, it also comes with some significant risk involved. Cyber criminals target individuals from all backgrounds as well as businesses of all sizes and in all industries, including financial institutions, healthcare operations, government entities and even non-profit organizations in order to gain access to personal and financial information. Businesses naturally have more at risk, as they are often trusted with the personal and financials information of both employees and customers.
Risk management has many different facets, and cyber risk can be just as damaging to a business as compliance risks or operational risks. It is crucial for insurance agents to reiterate the importance of cyber security to their commercial clients, and they can do so by offering some guidance on cyber risk management. Below are the components of an effective cyber risk management checklist.
Identification and Documentation
The first step of an effective cyber risk management checklist involves identifying and documenting the potential threats and vulnerabilities that a particular network or software program may face. This is called “Threat Modeling,” and it allows an organization to find any possible cyber security vulnerabilities before they are found by cyber criminals, and then make changes to reduce or eliminate those vulnerabilities.
Risk Assessment
In cyber risk management, the risk assessment combines the likelihood of a successful cyber attack with its assessed potential impact on the organization’s mission and goals as well as the potential financial impact. Performing a risk assessment helps ensure that risk management efforts are targeted at the highest cyber security risks, so that they are appropriate and cost-effective.
Monitoring and Responsibility
While the above-mentioned steps are crucial in creating an effective cyber risk management plan, a plan is only as good as those that see it through. An effective security program should have a team of responsible and knowledgeable leaders monitoring it, and it should be the responsibility of all employees in the organization to follow the policies and procedures set in place to meet cyber risk management goals.
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