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There’s a lot that goes into keeping your business secure online. As hackers continue to develop advanced strategies for accessing sensitive company information, you’ll need a comprehensive plan that can help you identify, evaluate, and manage risk. Each approach you use will be critical to securing your data ecosystem, and it could be the difference between adequately managing sensitive data and becoming vulnerable to attacks.

Two essential components of any data risk approach are risk assessment and risk management. Understanding each of these terms will enable you to develop a holistic plan that can repel threats.

What Is A Risk Assessment?

Risk assessment involves evaluating all current controls and data security plans to determine how effective they are at dealing with potential threats. A risk assessment typically comes after a risk analysis, where your business will identify any possible threats that it might face during daily operations.

A risk assessment is essentially an evaluation of how well your current infrastructure will hold up against data security threats. It involves many different angles, including the goals of your business, analyzing existing technology assets, and reviewing your company processes to determine their effectiveness.

Because of how specific risk assessment is, every business should develop a customized plan that’s based on industry best practices. Indeed, the risks that your company might face, as well as their potential impact, will be different from those of another company.

Most risk assessment plans involve the following steps:

1. Identifying And Locating Information Assets

A risk assessment plan begins by identifying all types of information that your business handles. This may include credit card data, addresses, patient records, etc. As you identify such data, don’t forget to determine where all this information is stored and handled.

You should also assess critical IT assets, including software, hardware, networks, and environmental security. Furthermore, rank all assets in terms of priority.

2. Identifying Potential Threats From Your Risk Analysis Step

The purpose of risk analysis is to determine the types of risk that your company might face. After these risks have been identified, the next step is to categorize them in terms of impact and likelihood of occurrence. This can only be done by comparing how each risk stacks up against the current IT infrastructure, which is the very definition of risk assessment.

3. Comparing Risks To Your Current Infrastructure To Identify Loopholes

Once risks have been compared to your existing data security plans, you can proceed to identify any possible vulnerabilities. Vulnerabilities may arise from vendor systems, software patches, employee workflows, and even where your servers are stored.

4. Analyzing The State Of Current Controls

The risk assessment also involves analyzing your existing controls. Controls include a combination of data encryption policies, hardware and software platforms, intrusion detection, and much more.

5. Determining How Likely An Incident Is To Occur

The final step of most risk assessment plans is to determine how likely a threat is to occur. Most risks are grouped into low, medium, and high probability of occurrence.

What Is Risk Management?

By definition, risk management is the process through which an organization acquires, stores, and uses its data- intending to eliminate the risk of breaches. Risk management is a holistic plan that covers multiple aspects of data usage within any company.

By implementing a process that governs how data is managed, companies can prevent the risk of hacks and strengthen any vulnerabilities that were exposed during the risk assessment step. You can also think of risk management as the process of developing an overarching framework for protecting your sensitive company information.

To develop an effective risk management plan, you need first to understand your risk environment, assess the current state of IT infrastructure, and implement specific procedures for responding to potential risks that may occur. Risk management also involves continuous, monitoring, auditing, and feedback on current data processes.

A risk management plan should also be responsive to emergent threats. For example, when the 2018 Starwood hacking exposed 500 million guest accounts, Marriot had to make critical changes to its risk management approach. This is because risk management is your blueprint towards keeping up with threats and developing timely responses to their occurrence.

Comparing Risk Assessment To Risk Analysis

When it comes to securing your business online or offline, there are interesting correlations between risk assessment vs. analysis management. You can think of risk assessment and analysis as critical components of a risk management plan. The analysis involves identifying your risk environment, while assessment consists of determining how well your systems stack up.

Allena Dominus

Started the career as a Product Manager, I now reveal the ins and outs of the digital world, online privacy, IoTs, and the trends shaping the technology industry and much more.

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