Technology Risk Management: Protecting Businesses in

small business cybersecurity cyber wise guy

Technology risk management involves the strategies, processes, and practices that organizations use to identify, assess, reduce, and monitor risks associated with technology systems and assets. As businesses increasingly rely on technology and confront growing cyber threats, this function becomes more and more crucial.

Effective technology risk management helps organizations grasp their technology-related risks and decide on suitable actions. It allows them to make informed decisions about using and investing in technology, weighing the risks against the benefits. Additionally, technology risk management helps businesses prepare for and cope with technology disruptions and failures, thus enhancing their resilience.

Types of Technology Risks

Technology risks can cause big problems for organizations if not handled well. Some of the most common and important technology risks include:

Cybersecurity Threats

Cyber threats are growing and getting more advanced. Hackers, organized crime groups, and government-backed actors are always trying to break into systems and take information. Some typical cyber risks include:

  • Malware infections that can damage systems and enable cybercrime
  • Phishing and social engineering tactics to gain unauthorized access
  • Distributed denial-of-service (DDoS) attacks that disrupt website and internet access
  • Data breaches that expose sensitive customer and business information

Proactive cybersecurity measures such as firewalls, threat monitoring, access controls, data encryption, and staff training can help reduce these threats.

Data Breaches

Beyond external attacks, data breaches can also happen because of people inside the organization, mistakes made by employees, or failures in the systems. Important information could be revealed, taken, erased, or damaged. Using the right access controls, keeping an eye on activities, and following data security rules can stop breaches from happening.

Network Outages

Network failures and connectivity issues can stop critical IT systems from working. These problems can happen because of natural disasters, power outages, software mistakes, setup errors, hardware issues, and more. Using backup infrastructure, doing regular maintenance, and testing can help lower the chances of these issues.

Software Failures

Errors in software code, integration issues, unexpected bugs, and unpatched vulnerabilities can cause system crashes, data loss, and business disruption. To prevent software-related problems, it’s important to test the software thoroughly, control changes, and update promptly. With strong technology controls and risk management procedures, organizations can protect against IT threats. However, it’s also crucial to have plans for recovery and continuity since no solution is flawless.

Assessing Technology Risks

A very important part of any technology risk management program is to carefully evaluate possible risks in order to prioritize and lessen them. There are several crucial steps in effectively assessing technology risks:

Risk Assessment Methodology

Organizations need to create a standard way to assess risks, including identifying assets, threats, vulnerabilities, risks, and controls. This helps to evaluate risks consistently across the organization. Popular frameworks like ISO 27001 or NIST 800-30 offer guidance for conducting these assessments.

Identifying Vulnerabilities

It’s important to regularly check infrastructure, applications, networks, and systems for possible weaknesses that could be exploited. This involves technical scans and also reviewing processes and physical security. It’s crucial to give priority to fixing or lessening known software weaknesses.

Analyzing Threats

Understanding the dangers that could take advantage of weaknesses is important. Gathering threat information is crucial to identify serious dangers such as determined attackers, harmful software campaigns, or internal risks unique to the organization. Modeling threats can match possible attacker objectives to vulnerable systems.

Assessing Likelihood and Impact

With vulnerabilities and threats in mind, it’s important to evaluate how likely and how impactful a risk event could be. Quantifying risks helps to decide which ones need the most attention and resources to reduce or fix.

Regular technology risk assessments using a consistent method help organizations see their risk exposure, make informed decisions about reducing high priority risks, and monitor changes over time.

Mitigating Technology Risks

Organizations can take various steps to mitigate and control technology risks:

Policies and Procedures

  • Develop and implement comprehensive information security policies, standards, procedures and guidelines. These should address areas like access controls, encryption, asset management, and acceptable use.
  • Review policies regularly and update as needed to adapt to new threats and business changes.
  • Ensure policies are backed by management and training is provided.

Access Controls

  • Control access to systems, data and networks through defenses like firewalls, VPNs, authentication mechanisms and the principle of least privilege.
  • Use role-based access controls and permissions to limit access to authorized users.
  • Disable or carefully manage access for privileged accounts.

Encryption

  • Encrypt data in transit and at rest to protect confidentiality. Use solutions like SSL/TLS for web traffic and full-disk encryption.
  • Carefully manage encryption keys. Consider using a key management service.

Backups

  • Maintain regular backups of critical systems and data. Test restoration to ensure backups are working.
  • Use offline, immutable backups to defend against ransomware.

Audits

  • Conduct audits to ensure policies and controls are functioning as intended. Audits can reveal gaps and areas for improvement.
  • Consider independent third-party audits for an unbiased assessment.
  • Review logs regularly to detect anomalies and potential incidents.

Monitoring and Reporting

Continuous monitoring of technology risks is very important to make sure that the controls continue to work well over time. Organizations should set important risk indicators to give early warnings if the risk increases. The technology risk teams should regularly check these indicators and report them to top management.

Plans to deal with incidents should be regularly updated and tested to make sure the organization can respond well to technology incidents or breaches. Any incidents should be thoroughly checked, with the main reasons found and plans to fix them put in place. The organization should learn from these incidents to improve managing risks.

Regular reports to top management and the board help them understand the organization’s technology risk. Dashboards with key risk indicators should track things like vulnerabilities, results of penetration tests, if security patches are up to date, attempted cyber attacks, and other important data. Major incidents need to be reported quickly.

These reports help top management understand how much technology risk the organization has and make big decisions about how much risk they are willing to take, budgets, and staffing. A strong risk culture starts at the top, with top management actively involved in watching and managing technology risks based on good reporting.

Business Continuity Planning

Business continuity planning is very important for managing technology risks. It means making detailed plans to ensure that essential business operations can keep going if there’s a major technology problem. This usually involves having backup systems and plans for when things go wrong.

Disaster recovery plans are a big part of business continuity planning for technology risks. They lay out the steps for getting IT systems and infrastructure back up and running after a disaster. This includes having backup servers that can take over if the main ones fail. It’s important to regularly test these plans.

Failover systems automatically switch to backup systems if the main ones stop working. This helps prevent downtime and disruption. Common failover systems include backup power supplies, generators, copying data to another data center, and spreading the workload across different servers. The switch to the backup needs to happen smoothly without affecting business operations.

Having backup systems across the technology setup helps reduce the risk of one single point of failure. This could mean having backup internet connections, duplicate hardware like routers and switches, and backup data centers. Important systems may need active redundancy to avoid any downtime.

The aim of business continuity planning for technology risks is to ensure that no single technology problem can stop crucial business activities. It’s important to develop, maintain, and test detailed plans. Managing technology risks should be closely linked to business continuity planning.

Staff Training

A very important part of handling technology risks is making sure that the staff knows and understands the security policies, rules, and best ways of doing things. Continuous security training should be given to all employees to create a culture of cybersecurity and decrease human mistakes.

Topics covered in security awareness training may include:

  • Cyber hygiene best practices like strong password creation and multi-factor authentication
  • How to identify phishing emails, suspicious links, and potential social engineering
  • Safe usage of company devices, networks, cloud applications, and data
  • Proper data handling and incident reporting procedures
  • Understanding of company security policies and acceptable use standards
  • Latest cyber threats and vulnerabilities to be aware of

In addition to being aware of security, it’s important to provide specific training for employees who work closely with sensitive data, critical systems, or specialized technologies. This training should be ongoing, especially for new employees and when there are new threats or tools in the company.

Regular and interesting training for staff is crucial for reducing internal risks. Employees are the first line of defense, and with the right training, they can help protect systems and data. It’s also important to have ways to check that employees understand and apply the training over time.

Third Party and Supply Chain Risks

With the rise of cloud computing, outsourcing, and global supply chains, companies are worried about the risks posed by third parties and vendors. They now depend more on external providers for important infrastructure, data storage, applications, and other services, which brings new vulnerabilities that need to be addressed.

Some key risks arising from third-parties include:

  • Data breaches: Vendors may experience cyber attacks that lead to unauthorized access of sensitive customer data. Organizations can be held liable for data handled by third parties.
  • Service disruptions: Outages at third party data centers or other critical service providers can hamper operations. Firms are dependent on the resilience of external suppliers.
  • Compliance failures: Vendors may fail to meet regulatory requirements around data privacy, security controls, etc. This exposes the organization to non-compliance.
  • Supply chain compromises: Adversaries are increasingly targeting weak links in supply chains to gain access further down the chain. Software vulnerabilities, counterfeit hardware, and compromised distribution channels are becoming more common.

To manage third party risks, organizations should:

  • Conduct thorough due diligence on all vendors handling sensitive data or critical services. Review their security controls, processes, and technology.
  • Include security, privacy, and resilience requirements in contracts. Make sure service level agreements are met.
  • Monitor vendor compliance over time through questionnaires and audits. Stay apprised of changes.
  • Evaluate concentrations of risk across multiple suppliers. Diversify vendors where possible.
  • Require notification of any data breach, service disruption, or major change from vendors.
  • Demand rapid incident response, forensic analysis, and remediation from providers if they suffer a cyber attack.
  • Build contingency plans to replace vendors or bring functions back in-house if major issues arise.

Strong vendor risk management is crucial for protecting organizations in today’s complex, interconnected world. Taking proactive steps can help reduce exposure.

Emerging Technology Risks

The fast pace of technology change creates new dangers that organizations need to be aware of. New technologies like the Internet of Things (IoT), artificial intelligence (AI), and cloud computing create new opportunities for cyber threats and weaknesses.

Internet of Things Security Risks

The Internet of Things is about more and more devices that are connected to the internet and have sensors to gather and share data. This includes things like smart home gadgets, medical devices, and self-driving cars. The IoT creates new ways for bad actors to attack and get into networks and data. If IoT devices aren’t well protected, they can be taken over and used to launch DDoS attacks.

Artificial Intelligence and Machine Learning Risks

AI and machine learning systems can do unexpected things and have biases, flaws, and blindspots that lead to harmful results. Adversarial attacks can change the inputs to AI systems to cause misclassifications or illegal discrimination. There are also risks of data tampering, stealing models, and cyberattacks powered by AI. Not testing, auditing, and monitoring AI systems properly can let risks go unnoticed.

Cloud Computing Threats

Migrating data and systems to the cloud can bring new security, privacy, and compliance risks. Cyber criminals often target cloud infrastructure to steal data or disrupt services. Without proper identity and access controls, unauthorized users can access cloud accounts and data. Cloud environments are complex, making it hard to see and control everything. To reduce risks, it’s important to have good cloud security training, testing, and monitoring.

It’s crucial for organizations to keep up with new technologies and the risks they bring. They need to always check for the latest threats, develop ways to reduce them, and keep their security policies and controls up to date. Taking a proactive and flexible approach to managing risks from new technology is very important.

Developing a Technology Risk Culture

A technology risk culture means creating company norms that encourage awareness, accountability, transparency, and open communication in managing technology risks. Ways to develop this culture include:

  • Making technology risk management responsibilities clear across the organization. Every employee should understand their role in identifying, assessing, reporting and mitigating tech risks.
  • Encouraging transparency and prompt reporting of all tech incidents, even minor ones. Avoid punitive action to foster openness.
  • Implementing accountability measures tied to technology risk management performance. This could be part of regular performance reviews.
  • Promoting collaboration between tech, security and business teams to break down silos. Align goals and build shared responsibility.
  • Setting the expectation that raising risk issues early is valued, not seen negatively.
  • Establishing open lines of communication on risk topics between staff and leadership. Welcome input.
  • Providing training and education to build risk management skills across the organization.
  • Celebrating and rewarding successful risk avoidance. Highlight instances where risks were well-managed.
  • Leading by example – senior leaders should visibly own and engage in risk management.
  • Measuring risk management performance with clear metrics and targets.
  • Making risk management central to technology and business processes and decisions.

With a culture that focuses on working together, being open, and learning, organizations can understand and get ready for technology risks. This kind of culture is crucial for a good risk management program.