Detecting Vulnerabilities: Focus on Risk Management and Assessment

A certain amount of risk-taking can drive innovation, but in a business environment, forward planning is required above all. Well-planned IT risk management enables companies to ensure they reach informed decisions about their security resources. In view of increasing threats and technical and regulatory developments, risk management is becoming more and more important. According to KPMG, around 72% of companies regularly measure their cyber security status on the basis of KPIs. However, only one in four companies uses Privileged Access Management (PAM) to protect digital identities, and only one in three companies uses SIEM (Security Incident and Event Management). A reorganization of the company’s IT risk management is therefore advisable.

“The better sister of fear is caution, but the worse brother of courage is overconfidence.” This quote is attributed to the German entrepreneur Philip Rosenthal. And he should know what he was talking about, as Rosenthal spent his life dealing with fragile glass and porcelain. But Rosenthal’s insight should also serve as a guiding principle for other companies, authorities and organizations. After all, IT risks cannot be adequately assessed and prioritized without quantitative methods. Inefficient use of resources and inadequate protection are the result. Inadequate risk assessments can also lead to financial losses and reputational damage. Today, IT risk management is more than just a “nice to have” – in times of constantly new cyber threats, it is an absolute must for every company that wants to protect its data, systems, employees, partner companies and company assets against IT risks in the most effective way possible.

Every year, the Allianz Risk Barometer lists the most serious corporate risks. Cyber incidents are currently in first place, followed by business interruptions. According to the survey, the cost of a data breach is around 4.35 million US dollars and rising. Effective IT risk management can prevent such incidents by identifying, assessing, prioritizing and mitigating potential threats.

The top 8 IT risks you should know:

1. Security threats such as hacker attacks, malware, phishing attacks and unauthorized access to sensitive data can lead to data theft, business interruptions, financial losses, sanctions and reputational damage.
2. Power outages, natural disasters, fires, floods or other hazards can damage the IT infrastructure and disrupt business processes.
3. System or network breakdowns and infrastructure disruptions also cause unplanned downtime, affecting operations, productivity and customer satisfaction.
4. Data loss or corruption can be caused by hardware failures, software errors, human error or malicious attacks. This can lead to the loss of important business and customer data or intellectual property.
5. New technologies such as cloud computing, Internet of Things (IoT) or artificial intelligence may pose risks to data security and regulatory compliance.
6. Non-compliance with regulations, data protection laws or contractual obligations may result in sanctions, financial penalties and legal proceedings. For example, NIS2, PCI DSS and HIPAA require regular vulnerability scans to protect sensitive data.
7. Dependence on third-party vendors, suppliers or service providers poses risks such as service interruptions, data breaches or contract disputes.
8. Insider threats, human error, inadequate training or negligent staff behavior can lead to data leaks, unauthorized access or mishandling of sensitive information.

IT risks refer to the probability of unexpected, negative business results due to the exploitation of vulnerabilities in hardware and software. A wide range of IT risk management methods can be used to mitigate these IT threats. Risk management is not an isolated and stand-alone approach. Instead, it involves many different procedures, guidelines and tools for identifying and measuring potential threats and vulnerabilities in your IT infrastructure. These are interlinked and should be tailored to the requirements of your company. The first step is always the risk assessment, i.e. the quantitative and qualitative evaluation of risks, followed by specific countermeasures.

For a reliable evaluation of the IT risks in your company, you should consider these four cornerstones of the risk assessment:

• Threats are all situations, actions or incidents that can compromise system security. This can be intentional or accidental, such as malware attacks, device outages, human error and natural disasters.
• Vulnerabilities are weaknesses or gaps that criminals exploit to steal sensitive information. The identification of vulnerabilities in IT systems and attack methods targeting them determines how well IT risks can be minimized.
• Assets is a broad term that encompasses both software and hardware, stored data, IT security guidelines, user data and even individual file folders containing sensitive data.
• Costs are the total damage that a company can suffer as a result of a security incident – be it financial, reputational or, in the worst case, both.

In its 2023 risk management benchmark study, Deloitte discovered that less than a third of the companies surveyed currently meet the requirements of a holistic risk management system.  In this context, a recent Accenture study indicates that risk management is becoming increasingly important for a large number of companies, as complex and interconnected risks are occurring increasingly fast. This was stated by 83 percent of those surveyed. 77 percent also stated that it is becoming more difficult to identify and manage risks and 72 percent were concerned that their risk management expertise could not keep pace with the rapidly changing IT landscape.

IT risk management tailored to modern requirements is therefore absolutely essential:

• Competition,
• the protection of your assets,
• secured business continuity,
• regulatory alignment and compliance,
• the protection of your corporate reputation,
• the optimization of costs and resources and
• to strengthen the trust of all stakeholders.

To protect your company information comprehensively and contain the increasing number of risks, there is no way around customized risk management.

The detection systems of the independent AV-TEST Institute detect and analyze 3.9 new malware samples each second. This means over 322,000 new malware variants per day. IT security incidents caused by malware attacks, data leaks and cyber attacks can affect the trust of customers, partners and the public. Proactive risk management helps to minimize the risk of such incidents and protect the company’s reputation. By identifying and prioritizing IT risks, you can also deploy resources more efficiently and make targeted investments in security mechanisms. This helps to minimize potential damage and costs associated with IT security incidents.