Cybersecurity Risk Assessment Definition
The term cybersecurity risk assessment describes the process of identifying and analyzing an organization’s overall risk. This is primarily accomplished by evaluating the organization’s security controls. Despite having a standard definition, however, the methodology and approach used by different service providers to evaluate these controls can vary greatly.
Some service providers will simply compare and map existing security controls against industry best practices and applicable compliance regulations. Others may take it one step further and actually test the setup and configuration of those controls to uncover vulnerabilities. Both are considered a cybersecurity risk assessment by definition. While each methodology may have the same goal of identifying and minimizing risk, they take vastly different approaches.
So, how do you know which type of assessment your organization will need? The first step is to understand the different assessment variations and how each approaches evaluating security controls.
Table of Contents
- Cybersecurity Risk Assessment Definition
- The Different Approaches to Cybersecurity Risk Assessments
- What is a Compliance Assessment?
- What is a Technical Assessment?
- Which Type of Assessment Should You Choose?
- Why You Should Perform a Cybersecurity Risk Assessment
- Satisfies Vendor Risk Assessment Questionnaires
- Creates a Baseline
- Prepares Organizations for Upcoming Audits and Certification
- Lowers Cybersecurity Insurance Premiums
- How to Use the Findings to Lower Risk
- Next Steps
The Different Approaches to Cybersecurity Risk Assessments
There are two primary approaches to an assessment: compliance-based and technical.
A compliance assessment maps an organization's security controls to ascertain if the existing controls meet compliance regulations, laws, and policies. This type of assessment is often performed through a series of interviews and is most commonly attestation-based. On the other hand, a technical assessment tests the security controls via vulnerability scanning and penetration testing to identify weaknesses and vulnerabilities that could lead to a data breach.
This article discusses the differences between compliance-based and technical assessments. It will also cover the importance of performing an assessment, regardless of the type, and how an organization can use the results to help lower its overall risk.
What is a Compliance Assessment?
A compliance assessment is a third-party evaluation to verify that the proper security controls are in place to meet the requirements of applicable regulations, laws, and policies.
This type of assessment is often performed via interviews and is most commonly attestation based. A cybersecurity expert will guide an organization through a series of questions to confirm what security controls are currently in place, as well as which ones may be missing. Since this does not involve the actual testing of the controls, the answers provided during the interviews are relied on to determine if there are security gaps that need to be addressed.
This type of evaluation will bring to light issues that could land an organization in regulatory “hot water” in the event of a data breach. It does not, however, indicate whether there are misconfigurations or other problems that could leave an organization vulnerable to a cyber-attack.
What is a Technical Assessment?
A technical assessment involves thorough testing of systems and security controls via vulnerability scanning and penetration testing of an organization's network and systems.
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Penetration testing helps identify systems and devices that are connected to the network, uncovers security flaws and vulnerabilities using manual and automated methods, and attempts to defeat or circumvent security features using various exploits whilst staying within testing constraints.
The information gathered from a technical assessment can help an organization identify which security controls need improvement and highlight vulnerabilities within a network that could lead to a data breach.
Not All Pen Tests Are Created Equal
Which Type of Assessment Should You Choose?
As you can see, the difference between a compliance and a technical assessment is primarily determined by the organization's security goals. If you're looking to confirm that your organization complies with regulations such as HIPAA, ISO 27000, or GDPR, then a compliance-based assessment is right for you. If you're more interested in confirming that the controls are functioning correctly, a technical assessment would be a better fit.
Sometimes, deciding between the two can be difficult. Two questions come to mind when weighing the pros and cons of security and compliance:
- If I am compliant, am I secure?
- If I am secure, am I compliant?
The answer is maybe. Again, compliance assessments confirm you have all the proper security controls in place, but it doesn't mean that they are configured correctly. A technical assessment affirms that all of the security controls you have in place are working as intended, but it doesn't identify whether or not controls are missing.
Performing both types of assessments simultaneously provides the best insight into an organization's overall cybersecurity risk. It is recommended to perform a compliance-based assessment first and then test the implemented security controls with a technical assessment.
Why Should You Perform a Cybersecurity Risk Assessment?
There are no federal laws requiring all organizations to perform a cybersecurity risk assessment. There are, however, state laws that may require organizations of a certain size to evaluate and test their security controls. The California Privacy Protection Act (CPRA) is a perfect example and will go into effect on January 1, 2023. Other states enacting similar legislation include Florida, Texas, Illinois, Massachusetts, and New York.
Although there are currently no federal laws requiring an organization to evaluate its risk, performing an assessment (whether compliance-based, technical, or both) can be advantageous for a host of other reasons.
First, a cybersecurity assessment can help confirm an organization is meeting its compliance obligations. Further, it helps minimize their overall cybersecurity risk and identifies vulnerabilities in their network before hackers can exploit them. A risk assessment also demonstrates to an organization's stakeholders and clients that they are proactive in their cybersecurity efforts.
Satisfies Vendor Risk Assessment Questionnaires
In today's digital age, being proactive in cybersecurity is considered a competitive advantage. As supply chain attacks continue to make headlines, organizations are taking a closer look at their third-party vendors. As a result, vendors are receiving more and more vendor risk assessment questionnaires that, if failed, could result in the loss of that particular client.
Creates a Baseline to Show Improvement
A cybersecurity risk assessment also creates a baseline to show improvement over time. If a data breach occurs, especially in highly regulated industries, showing security-based metrics and improvements can drastically change the way the organization is judged by its clients, regulators, and other governing bodies. In addition, it could also reduce the regulatory fines and minimize potential lawsuits that typically follow a breach.
Prepares Organizations for Upcoming Audits and Certification
Another important factor to consider is that performing an assessment can help an organization prepare for audits or an upcoming certification (e.g. SOC 2). The need for these services or certification depends largely on an organization's industry or the nature of the data they maintain.
Becoming certified in a specific regulation, such as CMMC, often comes with a significant price tag. Organizations failing to earn their certification on their first attempt often face similar costs the second time around. Performing a cybersecurity risk assessment prior to the certification process or upcoming audit can identify security gaps to be remediated in advance.
Lowers Cybersecurity Insurance Premiums
Finally, many cyber insurance companies are starting to require organizations to undertake proactive measures, such as a cybersecurity assessment, to be insured. Those that meet or exceed the minimum requirements set by the cyber insurance company often receive additional benefits, including a lower monthly premium.
How to Use the Findings to Lower Risk
Regardless of the type of risk assessment performed, an organization will receive a formal report following the conclusion of an engagement. The report will detail the findings of the assessment and provide recommendations for improvement.
These recommendations are often provided in the form of a cybersecurity risk matrix. A risk matrix displays the level of risk with the overall cost of remediation. This type of insight provides an organization with the tools needed to prioritize its remediation efforts.
For example, a high-risk, low-cost item would be one of the first issues to be remediated. The organization can also review low-risk, high-cost items to determine if it makes sense to remediate those issues or accept that risk. Every organization’s risk profile is different, and what may be an acceptable risk for one company may require remediation for another.
Next Steps
A cybersecurity risk assessment is essential for an organization’s security strategy. Determining what type of risk assessment is right for your organization can be difficult, because compliance does not equal being secure, and vice versa.
It is a common best practice to combine both a compliance-based and technical assessment in order to provide an organization with a holistic picture of their overall cybersecurity risks.
Did you know that Virtus' Cybersecurity Risk Management Program encompasses both a compliance-based and technical assessment?
Virtus' cybersecurity engineers will perform a cybersecurity assessment and penetration test to identify potential risks at the beginning of every program. The results are then used to create a custom cybersecurity strategy to bring an organization's overall risk to an acceptable level.