Your ultimate guide to IT risk assessment

A risk assessment (sometimes referred to as an IT risk assessment) is the process of identifying, evaluating, and mitigating risks associated with an organization’s IT systems and environment. This essential practice helps protect customer data, ensure compliance, and improve overall security/privacy. In this blog post, we’ll help you understand a risk assessment, its key components, and step-by-step instructions for conducting your own assessments.

Key takeaways

• IT risk assessments are crucial for identifying vulnerabilities, ensuring compliance, and managing costs while protecting assets.
• Key components to understanding risks include threat identification, vulnerability analysis, impact assessment, and likelihood evaluation.
• Regular monitoring and updating of risk assessments, along with engaging stakeholders, are essential for effective risk management and adapting to evolving threats. Using a risk register will help track your risk assessment process.

Understanding IT risk assessment

The main objective of a risk assessment is to ensure the highest level of protection while maintaining an acceptable level of risks. Costs and budget are one factor, but risks tend to be a balance of protection versus acceptable risks (which could include cost, availability, reputation, etc.)

In cybersecurity, risk assessment is the process of identifying, evaluating, examining, and alleviating risks associated with safeguarding assets (like employees, computers, and customer data) while maintaining regulatory compliance. Regular risk assessments enable organizations to promptly detect and prioritize new threats, fostering team collaboration, and bolstering overall data security.

These evaluations are vital in cybersecurity as they help your organization anticipate cyber risks that might interrupt business activities and cause reputational damage and even financial losses. 

They also help your organization’s technical and leadership teams get on the same page, equipping your organization’s leaders with the information they need to make decisions, including activities that help:

• Comply with legal and compliance standards
• Maintain reputation and avoid negative PR
• Manage budget or resource allocations

By being proactive about conducting such examinations regularly, businesses can uncover deficiencies within their infrastructure and adapt accordingly against continually changing threats.

The role of IT risk assessments in compliance

Your risk assessment process plays a crucial role in ensuring that organizations meet regulatory requirements and industry standards. By systematically identifying, evaluating, and mitigating risks, these assessments help organizations maintain compliance with laws and regulations such as GDPR, HIPAA, and more.

Regular risk assessments demonstrate due diligence and a proactive approach to managing potential threats, which can protect organizations from legal penalties and reputational damage. 

Furthermore, these assessments provide a clear framework for implementing necessary controls and documenting compliance efforts, making it easier to pass audits and inspections. Engaging in regular risk assessments not only strengthens an organization’s security posture, but also ensures that it remains aligned with evolving regulatory expectations.

Ten steps to conducting an IT risk assessment

Conducting a risk assessment is a systematic process that involves several steps to ensure comprehensive analysis and effective risk management:

1. Identify assets
2. 2. Identify threat actors
3. 3. Identify vulnerabilities
4. 4. Assess the likelihood a threat actor will exploit a vulnerability
5. 5. Analyze the impact of the event
6. 6. Calculate the ‘inherit’ risks
7. 7. Assess existing controls in place to mitigate risks
8. 8. Identify and implement additional controls (or mitigating controls) as needed
9. 9. Determine ‘residual’ risks after controls are effectively implemented
10. 10. Document/report findings and continually monitor/review to ensure risks are acceptable

1. Identify assets

The first step in conducting a risk assessment is to identify all the information assets within your organization. These assets can include hardware, software, data, and personnel. Creating a comprehensive inventory of these assets is crucial for understanding what needs protection and prioritizing resources accordingly.

2. Identify threats

After identifying your assets, the next step is to identify potential threats that could harm them. Threats can come from various sources, such as natural disasters, security incidents like cyber-attacks (e.g., malware, phishing), human errors, and system failures. Understanding these threats helps assess the level of risk associated with each asset.

Here’s a more complete list of the kinds of threats you may consider:

• Cyberattacks
  • Malware (e.g., viruses, ransomware, trojans)
  • Phishing or spear-phishing attacks
  • Denial of Service (DoS) or Distributed Denial of Service (DDoS) attacks
  • Man-in-the-middle (MITM) attacks
  • SQL injection attacks
  • Zero-day vulnerabilities
• Insider threats
  • Malicious insiders (e.g., disgruntled employees)
  • Accidental data leaks or breaches by employees
  • Privilege misuse or abuse of access rights
• Physical threats
  • Theft of IT equipment (e.g., laptops, servers)
  • Unauthorized physical access to data centers or offices
  • Natural disasters (e.g., floods, earthquakes, fires)
    Power outages or surges

• Human errors
  • Misconfigurations of systems or software
  • Accidental deletion or modification of data
  • Failure to follow security policies
• Supply chain threats
  • Compromised hardware or software from third-party vendors
  • Dependency on external service providers
  • Supply chain disruptions affecting IT operations
• Network vulnerabilities
  • Unsecured wireless networks
  • Outdated or unpatched software/hardware
  • Weak encryption protocols
• Social engineering attacks
  • Pretexting or baiting attacks
  • Vishing (voice phishing) or SMS phishing
  • Tailgating or impersonation attacks

3. Identify vulnerabilities

Once threats are identified, assess the vulnerabilities within your infrastructure that these threats could exploit. Vulnerabilities can be weaknesses in software, hardware, or even human factors. Conducting vulnerability scans and assessments will help you pinpoint these weak spots.

Here’s a more complete list of the kinds of vulnerabilities your organization may experience:

• Software vulnerabilities
  • Outdated or unpatched software (e.g., operating systems, applications)
  • Insecure code (e.g., coding flaws, weak input validation)
  • Unsupported software versions (end-of-life software)
  • Weak or default configuration settings (e.g., disabled security features)

• Network vulnerabilities
  • Unsecured or misconfigured firewalls
  • Lack of network segmentation (e.g., flat network structure)
  • Open ports or services that aren’t monitored
  • Weak or outdated encryption protocols (e.g., SSL instead of TLS)
  • Unsecured Wi-Fi networks or public Wi-Fi use
• Authentication and access control issues
  • Weak or reused passwords
  • Lack of multi-factor authentication (MFA)
  • Poorly managed privileged accounts (e.g., excessive admin rights)
  • Inadequate user access controls (e.g., lack of role-based access control)
  • Unmonitored user accounts (e.g., orphaned accounts from former employees)
• Data management vulnerabilities
  • Unencrypted sensitive data (At rest or in transit)
  • Poor data classification and handling policies
  • Lack of data loss prevention (DLP) Controls
  • Inadequate backup and recovery procedures
  • Insecure cloud storage or third-party storage services
• Physical security weaknesses
  • Lack of physical access controls (e.g., unlocked server rooms, no surveillance)
  • Inadequate protections for portable devices (e.g., laptops, smartphones)
  • Poor environmental controls (e.g., temperature, humidity) in data centers
  • Lack of secure disposal methods for hardware and documents
• Human factors
  • Lack of security awareness training for employees
  • Failure to follow security policies or procedures
  • Social engineering susceptibility (e.g., phishing, tailgating)
  • Poor incident response processes (e.g., delayed or ineffective response)
• Third-party and supply-chain vulnerabilities
  • Lack of vetting for third-party vendors and service providers
  • Insecure third-party applications or hardware
  • Poor contract management regarding security responsibilities
  • Inadequate monitoring of third-party activities
• System configuration vulnerabilities
  • Insecure default configurations for hardware/software
  • Poorly configured security tools (e.g., intrusion detection/prevention systems)
  • Lack of logging and monitoring for critical systems
  • Weak backup procedures and recovery plans
• Mobile and IoT device vulnerabilities
  • Insecure mobile devices (e.g., lack of encryption, no remote wipe capabilities)
  • Poor security for Internet of Things (IoT) Devices (e.g., default passwords, weak updates)
  • Insecure or unpatched mobile apps

Vulnerabilities can be tracked manually, using third parties, or by utilizing automated vulnerability scanning tools.

4. Analyze existing security controls

Analyzing existing controls involves evaluating the measures already in place to protect your assets from identified threats and vulnerabilities. This can include firewalls, antivirus software, encryption, and access controls. Understanding the effectiveness of these controls is essential for determining where additional measures may be needed.

5. Analyze the impact of threats

Analyzing the impact involves assessing the potential consequences if a threat exploits a vulnerability. This includes considering the financial, operational, and reputational damage that could occur. Understanding the impact helps in prioritizing risks and focusing on the most critical areas.

6. Assess the likelihood of threats

Assessing the likelihood involves evaluating the probability that a threat will exploit a vulnerability. This step requires considering factors such as the frequency of threat occurrences and the effectiveness of existing controls. A risk matrix can be useful for visualizing the likelihood and impact of various risks.

7. Calculate the risk level

After assessing both the impact and likelihood, calculate the risk levels for each identified threat and vulnerability and assign a risk score or level (e.g., low, medium, high). This can be done using qualitative or quantitative approaches. All risks are prioritized for mitigation with high-risk areas concentrated on first.

8. Identify and implement mitigating controls

This step involves determining the best ways to reduce or eliminate identified risks by implementing security measures or improving existing ones. Start by reviewing the risk levels calculated in the previous steps (based on likelihood and impact). Prioritize high-risk areas that require immediate attention.

Mitigating controls can be technical, administrative, or physical in nature and are designed to protect against threats by addressing vulnerabilities. Depending on the specific risks and vulnerabilities identified, choose controls that will provide the best protection. 

Examples include:

• Technical controls: Implementing solutions like firewalls, encryption, anti-malware tools, security patches, and regular software updates.
• Administrative controls: Creating and enforcing security policies, employee training programs, access management practices (e.g., least privilege access), and regular audits.
• Physical controls: Securing facilities with surveillance, access badges, secure disposal of hardware, and environmental controls for data centers (e.g., temperature control and fire suppression systems).

When selecting controls, it’s important to strike a balance between tightening security and maintaining system usability. Overly restrictive controls may hinder productivity or business operations. For example, implementing multi-factor authentication (MFA) improves security without creating too much friction for users, whereas too many layers of authentication might slow down routine processes unnecessarily.

Once controls are selected, plan and execute their implementation. This can involve:

• Installing and configuring new security technologies
• Updating existing configurations (e.g., network security, password policies)
• Developing and distributing new security policies or procedures
• Conducting security awareness training for employees

Ensure that implementation is coordinated with relevant stakeholders, including IT, security, compliance, and operations teams.

9. Document and report findings

Once the risk assessment is completed, it’s essential to thoroughly document all findings and communicate them to relevant stakeholders. This step involves compiling a detailed report that clearly explains the risks, vulnerabilities, and controls identified during the assessment and the actions taken to mitigate those risks. 

A well-organized risk assessment report provides a summary of the key findings, risk levels, and treatment plans for any unresolved risks, allowing both technical and non-technical stakeholders to understand the organization’s risk posture. Additionally, it’s important to include details on the effectiveness of controls and any evidence from testing, such as penetration test results or security audits, to demonstrate how well the implemented measures address the risks.

The report should be tailored to its audience, with high-level overviews for management that focus on strategic implications and business impacts, while more detailed technical information should be provided to IT and security teams. 

By documenting gaps in security, unmitigated risks, and areas for improvement, the report sets the stage for ongoing security enhancements. Archiving the report securely and maintaining version control ensures that the organization has a reliable record for compliance audits and future risk assessments, making it a valuable tool for continuous improvement in risk management.

10. Monitor and review

Monitoring and reviewing the risk assessment is an ongoing process that ensures the organization’s security measures remain effective as threats evolve. A critical component of this process is maintaining and updating a risk register, which acts as a living document that tracks identified risks, their severity, likelihood, and the controls in place. 

As part of the monitoring phase, the risk register should be continuously updated to reflect new vulnerabilities, emerging threats, or changes in business operations. This helps ensure that decision-makers have a real-time understanding of the organization’s risk posture and can act quickly to mitigate new threats before they escalate.

Periodic reviews of both the risk register and the overall risk assessment are necessary to confirm that existing controls remain effective and appropriate. As technology advances or organizational priorities shift, risks previously rated as low may become more critical, requiring new controls or updates to current ones. 

By regularly reviewing and updating the risk register, along with conducting reassessments, the organization can stay ahead of emerging risks. Continuous monitoring combined with a dynamic risk register fosters a proactive and adaptive risk management strategy, ensuring that security efforts remain aligned with evolving threats, regulatory requirements, and business objectives.

A step further: Your cyber security risk register

A cyber security risk register (or risk register) offers numerous benefits, including:

• Risk identification and cataloging
• Risk analysis and assessment
• Mitigation strategies

However, organizations may face some challenges when using a risk register, such as human error, time-consuming updates, and difficulty measuring multi-faceted risks. To overcome these challenges, opt for risk register software.

Purpose-built software provides automated risk assessment, risk treatment, reporting, and secure data storage, eliminating the issues associated with traditional spreadsheets. By incorporating a residual risk score, these tools allow organizations to keep risk organized—but at a much greater level of detail. By encompassing all of your risk in one place, it provides the opportunity to track risk more effectively over a period of time and into the future as opposed to a limited, moment-in-time view. Together, this drives more effective risk management. 

Selecting the optimal tool or software to manage your cyber security risk register is key to overcoming the challenges linked with traditional spreadsheets. Purpose-built software offers numerous advantages, such as:

• Automated risk assessment
• Risk treatment
• Reporting, including at-a-glance risk distribution, risk health, and risk categories
• Secure data storage

Thoropass’ Risk Register provides organizations with a top-down view of risks, categorizing their risks, and allowing them to attach remediation owners. It also assists with monitoring and managing risks to their business. 

These features not only save time, but also minimize human error and accurately measure complex risks. When selecting the right tool for your cyber security risk register, consider factors such as:

• Cost
• Usability
• Scalability
• Security

The right tool will not only streamline your risk management process, but also ensure that your organization stays ahead of potential cyber threats and maintains a strong security posture.

More FAQs

---