IAM Risk Management: Element of Corporate Risk Literacy

5 mins to read

Risk is relative and so is IAM risk management. What one person perceives as a significant risk may be observed simply as irritation to another. Others may not see it as a threat at all. However, the ability to recognize a risk when it appears and appropriately address it to reduce the danger of damage that it poses is perhaps the essential job of today’s CEOs and CISOs. Having a well-informed and trained organization that demonstrates ‘risk literacy’ in all its sectors makes that job easier. 

What is ‘Risk,’ and How Do You Manage It?

A risk emerges when something or someone is threatened with harm or a loss of some kind. A ‘risk’ can be many things, depending on the situation in which it arises. Different industries assess risks differently:

  • The insurance industry measures ‘risk’ to determine the price of a policy or the potential cost of a payout when damages do occur. 
  • The financial industry measures risk in terms of the value of possible financial returns or losses based on the circumstances of a financial transaction. 
  • The business industry balances the risk of investment losses with the potential for significant economic gains that might flow from a new product or process.      

The various internal departments of a company experience risk differently, too: 

  • The production department manages risks of worker injuries, failed or erroneous production standards, and violations of compliance regulations. 
  • The HR department manages the risks of employee misconduct, workforce issues, and violations of legal employment standards. 
  • The C-Suite manages risks of lost investments, failed product and service lines, and disappointed boards and shareholders. 

The point is that ‘risk’ means something different to each person and element of a corporation. Managing that multitude of risks requires understanding what all is at issue, recognizing the threats each situation poses and seeking and implementing processes that minimize or eliminate those threats. Depending on the company’s size, the CEO or CISO may be able to anticipate, strategize, and manage them all. However, in any organization, the sheer volume of potential risks is high enough to require more than just a single person to oversee their management. In some organizations, the best risk management tool is a well-trained, ‘risk literate’ workforce.  

Risk Literacy

Risk literacy is the ability to recognize and assess incoming threats, strategize and develop responses to those threats, then execute the responses to mitigate or eliminate those threats. A ‘risk literate’ leader must be able to assess for and manage the risks that emerge from each element of the business, both to protect its internal processes and also to protect the organization as a whole. 

As corporations grow in size and complexity, managing the risks that accompany that growth becomes exponentially more complicated, and in some cases, impossible. Accordingly, in most cases, it’s not sufficient for just the leader to be risk literate, but the entire organization must be (or become) risk literate as well. 

For the CISO, having a risk literate organization fully engaged in risk identification and management strategies is critical for preventing or minimizing losses due to cybercrime activity.  

Four-Step Process to ensure Enterprise-Wide Risk Literacy

As noted above, risks can arise in any aspect of the enterprise, at any time, and can be of any magnitude. Your risk literacy strategy must encompass, therefore, all parts of the company and all their components if it is to be as robust and proactive as possible. And, as is the truth with any digital strategy, achieving the result you want comes from engaging in a process that moves your organization in that direction.   

Generally, a data-gathering assessment is the first step in the journey to a risk literate enterprise. You’re looking for how and where vulnerabilities exist in the company’s core components: its technologies, its workers, its leadership, and its vendors.  

Technology Analysis 

Your organization’s technology is the prime target for a cyber thief, so ensure your barriers, alerts, defenses, and mitigation tools are as current as possible. 

Begin your assessment by generating an asset inventory that identifies each digital tool that connects with your central databases and systems. By this point in time, you should already have built some form of sophisticated cybersecurity strategy to protect those assets from unwanted intrusions. 

Analyze each digital asset for its security status, then evaluate the system(s) as a whole to determine if their individual standards total a comprehensive, whole organization cybersecurity web. You will most likely find legacy security practices that don’t or can’t detect today’s highly developed cyber threats, leaving you and your organization vulnerable to an attack. It is precisely these gaps that attract the attention of cybercriminals. 

Consider adding cutting-edge security programming, such as cloud-based identity and access management (IAM) SaaS programming, to reduce or eliminate these gaps. Cloud-based IAM services wrap digital defenses around the identities of the entities that access your company’s data and systems. Only those who can prove authorized access and legitimate purposes are allowed in. IAM technology eliminates the gaps and vulnerabilities exposed by legacy firewalls and network-based perimeters. 

Governance Analysis

The best cybersecurity strategy will fail if there are no governance rules around its implementation and management. Despite this reality, many companies fail to develop, install, or implement the policies needed to keep their new cybersecurity systems operating as required.  

At a minimum, your corporate cybersecurity policies should detail each step required of every entity that enters your digital business, both person and non-person:

  • Be sure to implement up-to-date antivirus software and program patches across the organization. 
  • Control user access using IAM methods that mandate double authentication practices and secure passwords, as examples.
  • Require screening of all email and social media traffic for malicious attachments and links.
  • Backup critical corporate data and maintain accurate disaster and recovery procedures.   

Corporate Culture Analysis

Again, your cybersecurity strategy only works when your entire organization understands the nature of the threats it faces and is dedicated to following cybersecurity practices every day. 

Leadership Teams

The C-Suite  

Sitting at the enterprise’s helm, the CEO and CISO are the leaders in developing the cybersecurity protocols that will keep the company and its assets safe. Not only are they continually assessing for risks and threats, but they are also constantly searching for opportunities for organizational growth and expansion. Their job is to marry these two searches, so they are always evaluating potential opportunities for the risks that come with them.  

With this information, they can then review the company’s status and how it might manage the risks inherent in incoming options. Are there silos that will impede communications? Will new capacities enhance or impair existing systems? Does the growth potential outweigh the risks of loss?    

The Board of Directors

The Board of Directors role in ensuring that adequate cybersecurity measures are in place is critical; it is frequently the loudest voice in cybersecurity investment decisions. Therefore, it should also be completely in the loop about where vulnerabilities lie, their threats, and the high value created by defending against them. Saving money by going short on cybersecurity investments often costs more money in the cleanup after the breach. 

Your Workforce

Your workforce is actually your front line of defense. A recent study revealed that 48% of the U.K. workers lacked adequate digital skills to recognize or respond to cyberattacks coming in through email or social media posts. In the three months of April through June 2019, cybercriminals made more than 146,000 attacks on U.K businesses, and, in many, if not most of them, the workers who weren’t aware of those threats inadvertently opened the door to the criminals who sent them.  

Your Vendors  

Too many companies omit their third-party vendors and contractors from their cybersecurity overview – to their peril. These critical business partners are often crucial to corporate success, but when they don’t have comprehensive security practices in place, they are also often the source of the breach. Your security system will benefit when you mandate that all your company vendors either have a detailed security plan in place or agree to be governed by yours.  

Risk of Loss Awareness Analysis

The purpose of these analyses is to ensure that every person and system within your organization is aware of the risks posed to its particular sector and knows how to address those risks before they become crises. Comprehensive and ongoing training across all corporate sectors will ensure that your entire enterprise is as prepared to manage an incoming threat as it is capable of handling your company’s growth. 

Risks are everywhere, but they don’t have to stop your organization from pursuing all its possibilities. With a comprehensive risk literacy program in place – one that includes IAM software as its primary security perimeter – you can follow every opportunity knowing that your enterprise is as safe as possible and able to manage any incoming threat it may experience.