What are cybersecurity risks? Types and Solutions

When you think of a cybersecurity risk, you probably think of things like data breach, malware, phishing, etc.

These are threats to your business, but the risk itself is the consequences of these threats to your business. The risk isn’t being attacked. The risk is losing your customer’s private data, or even going out of business.

Understanding these risks helps you to make informed decisions, and better protect your company from attack.

In this blog post, we will cover:

• The different types of cybersecurity risk
• How these risks can impact your company
• What you can do to reduce these risks

By the end of this article, you’ll have a plan of action to mitigate these risks and protect your company.

Risks come in different shapes and sizes

When anything happens to your business, there are different types of risk you need to consider.

Time/Resources

An attack could cost you time in several ways. You might have to shut down for days, weeks, or even months. You’ll also need to dedicate resources to investigating and remediating the incident.

For example, the National Bank of Pakistan suffered a destructive cyber attack on October 29, 2021. The attack impacted some of its services, including the bank’s ATMs, internal network, and mobile apps. In response to this, they had to invest a lot of time investigating the issue. This not only took up the time of the people carrying out the investigation, but they needed to put all business on hold in the meantime. 

Financial

This is anything you can hang a dollar sign on. Hiring contractors to fix an issue, buying software, paying fines, etc.

For example, ​​in 2017 the global shipping company Maersk was a victim of a ‘NotPetya’ attack. The attack caused an estimated $300 million in damages, including lost revenue and the cost of IT recovery. Maersk had to replace thousands of servers, computers, and network equipment, and it took weeks to restore its IT systems. 

Operational

More often than not, an attack will change the way you do business. The systems and processes will likely need to change, and maybe even the hierarchy.

For example, Target was the victim of a data breach in 2013. The breach affected approximately 40 million credit and debit card accounts, leading to significant short-term and long-term consequences. The company had to allocate resources towards preventing, detecting, and resolving cyber breaches, and senior management showed extremely high concern for cybersecurity incidents.

Reputational

Trust is a huge part of the relationship with your customers. Experiencing a breach can seriously affect this trust, and damage your wider reputation at the same time.

For example, when British Airways experienced a data breach it was highlighted as one of the reasons for its reputation falling to a four-year low in 2019. Even after the direct financial costs of the cyber incident were resolved, the ensuing reputational damage continued to affect the company for years.

Legal

Your company has a legal responsibility to protect your customers. This might come in the form of GDPR, HIPAA, or any other law or regulation. Fines for this have been known to get as high as $1.2 billion

For example, Equifax experienced a data breach in 2017 that exposed the personal information of over 147 million people. The breach resulted in a settlement of $700 million with the Federal Trade Commission, the Consumer Financial Protection Bureau, and 50 U.S. states and territories.

Big and Important Inc.

These risks to your business don’t exist in isolation. Everything is interconnected, and when something is a risk to one thing, it’s likely a risk to everything else, too.

To understand how this looks, let’s take a look at the very fictional case study of Big and Important Inc:

It was the summer of 2022, and everything was going great for Big and Important Inc. The C-suite were having their annual pat-themselves-on-the-back retreat in Mauritius, where they drink cocktails, get massages, and have money fights on the beach.

When suddenly, everyone’s iPhones started bleeping. Across the beach, you hear shouts of “Dear lord!”, “Oh my goodness!”, and “Who wants a strawberry daiquiri?”

(The third person had left their phone in the ping-pong room, and hadn’t seen the email)

There’s been a breach!

Millions of customer records have been stolen via an API, and the attacker has threatened to leak them online.

The CEO immediately cancels that evening’s champagne tasting, and summons everyone to his suite. When everyone arrives, he asks for a risk report from everyone to get a clear picture of what this breach means to the company.

The Risk Report

Operational

The affected API needs to be locked down while the breach is investigated. This will effectively grind the whole business to a halt, as most of the systems rely on this API.

Any short-term plans have to be shelved while the company deals with this issue. And long-term plans will need to be re-evaluated once we understand the full damage of the breach.

Time/Resources

The attack will need to be investigated and remedied. This will take up all the time of internal specialists and might require external contractors too.

The customer support teams will be spending all their time processing and dealing with complaints about the breach and the loss of service.

The legal team will have their hands full dealing with the inevitable regulatory and legal issues that are raised

Essentially, every department in the company will have to divert their effort to deal with the aftermath of this breach

Legal

The company will likely now face fines from regulatory bodies for non-compliance. This will include the SEC, GDPR, and HIPAA.

There is also the risk of lawsuits from individuals affected by the breach. This could be standalone cases, or even class action lawsuits.

Reputational

This incident is a double-whammy for the company’s reputation. Not only is trust heavily damaged by the loss of customer data. But the lack of service during the incident also tells customers that the company isn’t reliable.

This will not only harm the relationship with existing customers, but it also tells potential customers that this company is too risky to go with.

Financial

Everything above ultimately snowballs together into one huge financial risk. They’ll need to halt business while we investigate will cost us revenue, while diverting resources and hiring external contractors. 

If the company is found to be in breach of regulations, we will have HUGE fines to pay. 

And the hit to the company’s reputation will have a long-lasting effect on revenue. The PR and marketing to fix this reputational damage will likely cost a fortune.

Solution

It’s easier said than done, but the best way to mitigate these risks is to be prepared for any cybersecurity attacks.

It’s a matter of when not if, which is why you need to be proactive. Not waiting for something to happen, and evaluating your current situation to identify current risks.

Let’s break down this process, to make it as easy as possible to be prepared.

Step 1 – Understand and prioritize your risks

You need to understand your company’s attack surface before you can do anything.

The best way to do this is by taking inventory of your assets. Once you’ve done this, you can prioritize based on how much risk there is against each thing.

Anything critical to the business operation would be considered the highest priority. Often this can be measured by putting a dollar value on it. For example, if something could cost you $1,000, it won’t be as high a priority as something that could cost you $1 million

Step 2 – Have a plan (and test it!)

Once you know what your priorities are, you then need to have a solid incident response plan and policy in place. This is a document outlining what you should do in the event of a data breach or other attack

For example, if Critical Database X gets destroyed, how are you going to recover it? Is there a backup? Is that backup in a different region? How easy is it to transition to this backup?

Your incident response plan also needs to outline roles and responsibilities and be approved by senior leadership.

To identify any gaps in your plan, you’ll want to run: tabletop exercises, walkthroughs, attack simulations, and get third-party assessments.

Preventative measures

Despite what some vendors will say, no ‘silver bullet’ tool in cybersecurity will solve all your problems. Once you’ve got a clear idea of your assets and where the risks are, you can then find the right toolset for your company.

You want to find things that make it as quick as possible to go from zero information to a full report. Identify what processes can be delegated or automated.

Common preventative measures include:

• Staff Training
• MFA
• WAF
• API Protection
• Code Scanning
• Man Pen Tests
• Zero Day Attack Protection

Review

As much as we’d all like it to be, this process isn’t one-and-done. You need to be constantly reviewing and repeating this process to ensure you’re mitigating these risks and any new risks.

The standard is an annual review, but really it should be way more often than that.

This is easier if you’ve got a team dedicated to this, but if you don’t, you need to weigh up the cost of this process vs the risks. You can’t go through this every week, or no one would get any work done.

But you need to be confident that you’re giving yourself the best chance to fill gaps and protect the company.