Digital risk management is a critical aspect of governance and overall organizational success. By leveraging digital risk initiatives, organizations can protect their assets, enhance cyber security, and create a culture of trust within the boardroom. But is it really the case now?
According to Global Digital Trust Insights, almost 60% of directors say their board is not very effective in understanding the drivers and impacts of cyber threats on their organization. In other words, it is time for boards of directors to get involved — they need to encourage risk assessments and demand a sustainable digital risk management strategy.
Keep reading to learn more about:
- Digital risk management
- Key digital risks
- Digital risk management and monitoring tactics
- Support processes with the right technology
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What is digital risk management?
Digital risk management is the process of identifying, assessing, and mitigating the risks associated with digital technologies and services. It’s a collaborative activity that involves both technical and non-technical stakeholders, including:
- Board members
- CISO (The Chief Information Security Officer)
- Compliance officers
- The risk committee
- IT teams
- Internal auditors
Improving risk evaluation and monitoring is possible with the right board management software, but it takes board members who understand digital risks and the potential of sensitive data breaches. That’s why it’s so important for board members to have a clear understanding of digital transformation and all the threats that come along with it.
Boards that take proactive steps to identify exposed assets and manage digital risk will protect their organizations from potentially devastating consequences.
|“Management makes business decisions about how much cyber risk the company is willing to accept in pursuit of its strategy and objectives. The role of the board is to provide governance and oversight, including credible challenges on key policies and decisions. To fulfill this critical role, the board should have adequate access to cyber expertise and obtain assurance on their own security and the security of their key vendors.”|
James Lam, Cybersecurity Expert and Author
Key digital risks to be aware of
Digital transformation is a comprehensive process affecting virtually every aspect of an organization. Hackers know it very well, which is why they keep attacking sensitive data and exposed assets — malware breaches increased by 358% in 2020, while ransomware increased by 435%.
In such circumstances, it’s important for board members to understand that their companies face more than one digital security risk. These are the key digital risks.
Cloud technologies are convenient and cost-effective, but they also expose sensitive data to potential cyber threats. Cloud-related digital risks occur due to insufficient processes, failures, and incompatibilities.
Data breaches and leaks
Cyber-attacks that aim to steal, destroy, and exploit information cause data breaches. They can damage an organization’s reputation, lead to financial losses, and disrupt operations. At the same time, data leaks occur due to inadequate data leak detection solutions and insufficient employee training.
Operational risk compliance
Regulatory compliance is essential for businesses, no matter their size or industry. Non-compliance can lead to lawsuits, fines, and serious reputational damage. It makes compliance crucial in the business protection process as part of its digital risk program.
Digital transformation demands a skilled workforce. A shortage of qualified professionals could lead to operational failures and put an organization at risk of cyber-attacks or financial losses due to a lack of knowledge.
Subpar digital security practices can leave an organization exposed to cyber-attacks. These include everything from weak passwords and lack of encryption to outdated software. Organizations should invest in robust and comprehensive digital solutions for improving the evaluation and monitoring of risk.
Automation technology comes with risks associated with malfunctioning or human error. In this case, managing digital risk suggests close monitoring of all modifications. It is also important to carefully integrate innovation technologies and ensure proper training of personnel.
Third-party vendor risks
Organizations often rely on third-party vendors for critical services, such as cloud providers, software developers, and communication platforms. In this case, due diligence should be a part of the risk management process since it could reveal non-compliance and external vulnerabilities associated with the suppliers.
Resilience is a major aspect of the digital risk management framework. It refers to an organization’s ability to manage digital risk after a disruption. That means having effective digital risk management solutions in place, such as backups and recovery plans.
Data protection and privacy
Digital risks are also associated with private consumer data. The main business objective of risk management is to protect sensitive data, ensuring the secure storage of identifiable information. This is not only a legal requirement but also a way to protect sensitive information from security risks.
|Note: Each of these threats can cause digital disruption and single-handedly jeopardize the functioning of the entire organization.|
Digital risk management and monitoring tactics
Did you know that the total damage by cyberattacks reached $6 trillion in 2022? The goal of digital risk management for board of directors is to minimize the risk potential and implement the latest cybersecurity tactics. These include the following.
Keep an eye on exposed assets
Use digital risk management tools to discover and continuously monitor vulnerable assets. We are talking about core cyber assets that power the company’s business operations. You can divide those digital risks into three categories:
- Technology assets. Think about different aspects of digital transformation, such as applications, SaaS services, and device networks.
- Human assets. You should carefully manage authorizations and access preferences, as well as keep track of employee training.
- Process assets. Check if your processes are secure and up-to-date. That includes company policies, protocols, and standards.
Beware of data breaches and leaks
Data leakages can have catastrophic consequences for any government or organization, which makes it critical to understand the risk factors. Implement a solid detection and response plan that covers the whole organization. That’s the only way for the prevention of digital risks to actually work.
Regularly update your risk management policy
Organizations need to create a framework for managing cyber risks and regularly assess them. This includes setting up procedures and protocols, tracking critical assets, and publishing risk management policies.
Prevent unauthorized access
Preventing unauthorized access is a key part of the risk management process. Implement measures such as multi-factor authentication and two-step verification to keep your systems safe.
At the same time, digital risk management for board members should also focus on setting priorities. It means you can establish privileged accounts and access control policies to ensure critical assets are secure.
Ensure third-party compliance
Risk management strategies need to consider the potential risks associated with working with third-party vendors. Make sure you have proper assessments in place for every supplier or partner and establish a solid due diligence process to ensure compliance.
|Important: By combining all of the abovementioned tactics, you can come up with a comprehensive threat detection solution.|
Apart from these digital initiatives, you should pay attention to the latest trends that aim to minimize digital risks. The most important trends for 2023 are as follows:
- Risk management starts from the top. Board members need to understand the magnitude of cybersecurity risk management and take an active role in setting the strategy.
- Emphasize risk prioritization. Boards of directors need to focus on critical digital assets when it matters the most.
- Prepare for ransomware attacks. You can hardly avoid them, but you can significantly reduce business resiliency risk if you prepare well in advance.
- Make an all-encompassing cybersecurity plan. Take a holistic approach to risk management and prepare for possible scenarios.
- Invest in threat intelligence tools. You have to be aware of the latest security threats and consider using board portals for full protection.
Support processes with the right technology
Board portals are digital platforms that provide a secure way for boards of directors to share sensitive information and make decisions. With this platform at your disposal, you can drastically reduce the chances of an attack:
- Mitigate the risks associated with a virtual board meeting
- Minimize the chances of data leaks or breaches
- Improve communication and collaboration among board members
- Run a paperless board meeting
- Simplify compliance management
- Better manage risk on an ongoing basis
With so many advantages, board portals can help businesses protect themselves against a wide range of risks and ensure continued success. If you are looking for board management software, try the board portal by iDeals. It is our expert’s number one choice.
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What are the best digital risk management tools?
The best cybersecurity management tools vary depending on the specific risks that your organization is facing. However, you should always look for a platform providing a clear governance framework for managing digital risk.
What is the objective of digital risk management?
The objective of digital risk management is to protect an organization’s digital assets from unauthorized access, use, disclosure, interception, or destruction. This can include protecting against cyber-attacks, data breaches, and other malicious activities.
How does digital technology reduce business risk?
Digital technology reduces business risk by providing a secure, reliable way to store and share data. It increases communication and collaboration between employees, thus leading to better decision-making and fewer mistakes. Additionally, online tools allow businesses to automate tasks such as bookkeeping, marketing, and customer service, which reduces the chances of human error.