A Guide to Data Risk Management

FACT: Data is the lifeblood of today’s modern business.

Inadequate data protection can significantly impact an organization’s ability to function.

Risk needs to be both quantified and qualified in order to properly secure it.

Proper data risk management enables companies to make informed decisions and protect their sensitive data.

In this post, we’ll cover what data risk management is, how to perform a data risk assessment, common risks businesses face, and several risk mitigation strategies you can implement to protect your assets.

What is data risk management?

Data risk management is the process of identifying, assessing, and mitigating risks within an organization. It involves implementing policies, procedures, and technologies to protect data from various threats, like unauthorized access, data breaches, data loss, and data corruption.

The goal of data risk management is to ensure the confidentiality, integrity, and availability of data. At the same time, it should minimize the potential impact of data-related risks on the organization’s operations, reputation, and compliance obligations.

Why is data risk management important?

Data risk management is important for several reasons:

Data Protection: With the increasing reliance on digital data, protecting sensitive information such as personal data, financial records, and intellectual property is crucial to prevent unauthorized access, theft, or misuse.
Regulatory Compliance: Organizations are often subject to various data protection regulations (e.g., GDPR, HIPAA) that mandate specific data security measures. Data risk management helps ensure compliance with these regulations, thereby avoiding legal penalties and reputational damage.
Business Continuity: Effective data risk management helps maintain the availability and integrity of data, which is essential for the continuous operation of business processes and services.
Reputation Management: Data breaches can significantly damage your organization’s reputation, leading to a loss of customer trust and potential business opportunities. Proactively managing data risks can help prevent such incidents.
Financial Impact: The costs associated with data breaches, including legal fees, fines, and remediation efforts, can be substantial. Data risk management helps mitigate these risks by preventing or reducing the impact of data-related incidents.
Informed Decision Making: Data risk management provides insights into the potential risks and vulnerabilities within an organization’s data ecosystem, enabling informed decision-making and resource allocation for effective risk mitigation.

Eight steps to perform a data risk assessment

Before you can manage risk, you first need to identify and prioritize the risks to your data. This is often done through a data risk assessment. The process involves the following steps:

Identify Data Assets: Begin by identifying and inventorying all data assets within your organization. This includes databases, files, applications, and any other repositories where data is stored or processed.
Classify Data: Classify data based on its sensitivity and importance to your organization. This could include categories such as public, internal, confidential, or highly confidential. Classification helps determine the level of protection required for different types of data.
Identify Threats and Vulnerabilities: For each data asset, identify potential threats (e.g., leaked employee credentials, natural disasters, human error) and vulnerabilities (e.g., SQL Injection, outdated software). Use threat intelligence sources and vulnerability assessments to inform this process.
Assess Impact and Likelihood: For each identified risk (a combination of threats and vulnerabilities), assess the potential impact on the organization if the risk were to materialize, as well as the likelihood of it occurring. This can be done qualitatively (e.g., low, medium, high) or quantitatively (e.g., financial impact, probability percentages).
Prioritize Risks: Based on the impact and likelihood assessments, prioritize the risks. This will help focus your efforts on addressing the most significant risks first.
Implement Controls: Determine and implement appropriate controls to mitigate each high-priority risk. These could include technical measures (e.g., resetting passwords, access controls), administrative measures (e.g., policies, training), and physical measures (e.g., secure facilities).
Monitor and Review: Regularly monitor the effectiveness of the implemented controls and review the risk assessment to ensure it remains up to date. Adjust controls and priorities as necessary based on changes in the threat landscape, business operations, or regulatory requirements.
Document and Report: Document the risk assessment process, findings, and implemented controls. Report this information to relevant stakeholders, including senior management, to ensure they are informed about the organization’s data risk posture.

It’s important to note that performing a data risk assessment is an ongoing process that should be revisited regularly or whenever there are significant changes in your organization’s data environment.

Common data risks

Now that we’ve covered why data risk management matters and how to identify your risks, here’s a list of common data risks organizations need to worry about:

Data Breaches: Unauthorized access to sensitive data can lead to financial loss, reputational damage, and legal consequences.
Data Loss: Accidental or intentional deletion, corruption, or destruction of data can disrupt business operations and lead to loss of valuable information.
Data Privacy Violations: Non-compliance with data protection regulations (such as GDPR or CCPA) can result in hefty fines and loss of customer trust.
Data Quality Issues: Inaccurate, incomplete, or outdated data can lead to poor decision-making, inefficiencies, and customer dissatisfaction.
Insider Threats: Employees or contractors with access to sensitive data can intentionally or unintentionally cause data breaches or leaks.
External Attacks: Cyberattacks such as phishing, ransomware, and malware can compromise data integrity and availability.
Third-Party Risks: Dependence on external vendors or partners for data processing or storage can introduce vulnerabilities if they have inadequate security measures.
Legal and Regulatory Compliance: Failure to comply with industry-specific regulations and standards can result in legal penalties and operational disruptions.
Data Accessibility: Ensuring that authorized users have timely and secure access to data while preventing unauthorized access is a constant challenge.
Data Storage and Management: The increasing volume and complexity of data require special attention to ensure that it’s stored securely and efficiently.

10 Risk management strategies

Here are ten data risk management strategies that you can use to protect your sensitive information and reduce the likelihood of a data breach:

Access Control: Implement strict access control policies to ensure that only authorized personnel can access sensitive data. Use role-based access controls (RBAC) to limit access based on the user’s role and responsibilities. Segment your network to prevent a breach from spreading.
Encryption: Encrypt sensitive data both at rest and in transit to protect it from unauthorized access. This is especially important for data that’s stored in the cloud or transmitted over the internet.
Regular Audits and Monitoring: Conduct regular audits of your data security policies and practices. Use monitoring tools to detect any unusual activities or potential breaches in real-time.
Data Backup and Recovery: Regularly backup critical data and ensure that you have a comprehensive disaster recovery plan in place. This will help you quickly restore data in case of a breach.
Incident Response Plan: Develop and regularly update an incident response plan. This should include procedures for identifying, containing, and mitigating data breaches, as well as notifying affected parties.
Employee Training: Regularly train employees on data security best practices and the importance of protecting sensitive information. This can help prevent accidental leaks or breaches due to human error.
Vendor Risk Management: Assess the security practices of third-party vendors who have access to your data. Ensure they adhere to your security standards to prevent data breaches through third-party systems.
Regular Software Updates: Keep all software and systems up to date with the latest security patches. This helps protect against known vulnerabilities that could be exploited by attackers.
Data Retention Policies: Implement data retention policies to ensure that data is not kept longer than necessary. This reduces the amount of data at risk and helps comply with data protection regulations.
Dark Web Monitoring: Leverage dark web monitoring tools to scan for and identify any company or customer data that may have been leaked or is being sold on the dark web. This can provide early warning signs of a data breach and enables you to proactively mitigate the risk before the data is exploited.

How Breachsense Helps Protect Data

Data breaches are arguably one of the biggest risks organizations face.

According to the IBM Cost of a Data Breach Report, the average cost of a data breach is USD 4.45 million.

The Verizon Data Breach Investigations Report found that 86% of all breaches involve stolen or weak passwords.

Exploiting leaked credentials and session tokens has become the modus operandi of choice for gaining initial access because it bypasses traditional security defenses and goes undetected.

Book a meeting to learn how Breachsense gives you visibility into your leaked data so that you can act before criminals do.