An activity, operation, application, action or an event can be subjected to a risk assessment in order to assess and then manage the risks that are connected with that particular activity, operation, application, action or event. It involves identifying possible threats and assessing both the likelihood of those risks occurring and the impact they may have. The purpose of a risk assessment is to prioritize and manage risk in such a manner that the benefits of an activity are increased while the associated risks are decreased as much as possible.
The following is a rundown of the overall process involved in conducting a risk assessment:
- Determine the risks: To begin, it is necessary to determine the threats that might be posed by the activity or operation that is being evaluated. This may entail engaging with important stakeholders, evaluating occurrences that have occurred in the past, and determining the sort of activity.
- Evaluate the likelihood of dangers as well as their potential impact: Once possible risks have been identified, the next step is to evaluate the likelihood of each risk occurring and its potential impact. Estimating the probability of the risk occurring, thinking about the various implications of the risk, and calculating the total effect of the risk are all potential steps in this process.
- Evaluate the efficacy of the current controls and mitigation measures by conducting a review of the controls and mitigation measures that are already in place to manage the risks. This may entail doing site inspections, assessing security systems and technology, and going over existing policies and procedures for the organisation.
- Establish priorities among the risks: Taking into account the likelihood of each risk occurring and the potential harm it may do, establish priorities among the risks in order to establish which ones are the most urgent and call for immediate action.
- Create a strategy for risk management: Using the results of the risk assessment as a guide, create a plan for risk management that will address the risks that are the most significant. This may entail establishing new controls and mitigating measures or making adjustments to procedures that are already in place in order to decrease the possibility of risks occurring and their potential impact.
- Monitor and review: In order to ensure that the risk management plan continues to be effective over the course of time, it is important to regularly monitor both the risks and the effectiveness of the risk management plan. In addition, the risk assessment process and its results should also be reviewed.
Following these procedures will allow businesses to undertake a risk assessment that is both complete and effective, which will assist them in managing risks and making decisions on risk management that are informed.
As an example, below is a high level risk assessment that analyses the moving of an on-premise application to the cloud:
- Identify Risks:
- Data privacy and confidentiality
- Data loss or corruption
- Compliance with regulatory requirements
- Cloud service provider security and reliability
- Network security and availability
- Access control and authentication
- Evaluate Likelihood and Impact:
- Data privacy and confidentiality: High likelihood, high impact
- Data loss or corruption: Medium likelihood, high impact
- Compliance with regulatory requirements: High likelihood, medium impact
- Cloud service provider security and reliability: Low likelihood, high impact
- Network security and availability: Medium likelihood, medium impact
- Access control and authentication: High likelihood, medium impact
- Assess Existing Controls:
- Data privacy and confidentiality: Encryption of sensitive data in transit and at rest
- Data loss or corruption: Regular backups of data
- Compliance with regulatory requirements: Regular security audits and compliance checks
- Cloud service provider security and reliability: Review of cloud service provider’s security and reliability measures
- Network security and availability: Firewalls, secure network configuration, and monitoring of network activity
- Access control and authentication: Two-factor authentication, strong passwords, and regular monitoring of user activity
- Prioritize Risks:
- Data privacy and confidentiality
- Data loss or corruption
- Compliance with regulatory requirements
- Cloud service provider security and reliability
- Network security and availability
- Access control and authentication
- Develop Risk Management Plan:
- Data privacy and confidentiality: Implement data encryption, restricted access to sensitive data, and regular security audits
- Data loss or corruption: Regular backups, disaster recovery planning, and data loss prevention measures
- Compliance with regulatory requirements: Regular security audits, compliance monitoring, and reporting to relevant authorities
- Cloud service provider security and reliability: Regular reviews of cloud service provider security measures and due diligence when selecting a provider
- Network security and availability: Regular network monitoring, use of firewalls, and secure network configuration
- Access control and authentication: Implement multi-factor authentication, strong password policies, and regular user activity monitoring
- Monitor and Review:
- Regularly monitor the risks and the effectiveness of the risk management plan
- Review the risk assessment process and results regularly to ensure that the risk management plan remains effective over time
