Key Takeaways

  1. Legal and Regulatory Compliance: Risk assessments are essential for compliance in industries like healthcare and manufacturing, ensuring legal obligations and strategic protections are met.
  2. Strategic Risk Management: They enable strategic management of cybersecurity risks through proactive identification, evaluation, and mitigation.
  3. Alignment with Business Objectives: Risk assessments align cybersecurity efforts with business goals, optimizing resource use and enhancing overall security posture.

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Risk Assessments

Performing risk assessments and overseeing risk management programs are essential skills for anyone in cybersecurity. Many cybersecurity frameworks and regulations require a risk assessment, including, but not limited to:

Cybersecurity Frameworks

  • Collective Controls Catalog (v2021, v2022, v2023)
  • NIST Cybersecurity Framework (v1.0, v1.1, v2.0)
  • ISO 27002:2005, 27002:2013, 27002:2022
  • NIST Special Publication 800-171
  • NIST Privacy Framework (v1.0)
  • Factor Analysis of Information Risk (FAIR)
  • Department of Defense (DoD) Risk Management Framework (RMF)
  • Cybersecurity Maturity Model Certification (CMMC) – Level 2
  • Cloud Security Alliance Cloud Control Matrix (CSA-CCM v3.0.1 and v4.0)
  • Farm Credit Administration (FCA) Examination Manual (v2022)
  • Payment Card International (PCI) Data Security Standard (DSS) (v3.2.1 and v4.0)
  • US Securities and Exchange Commission (SEC) 2023 Cybersecurity Disclosure Rules (v2023)


  • Health Insurance Portability and Accountability Act (HIPAA)
  • General Data Protection Regulation (GDPR)
  • California Consumer Privacy Act (CCPA)
  • Gramm–Leach–Bliley Act (GLBA)
  • Personal Information Protection and Electronic Documents Act (PIPEDA)
  • Protection of Personal Information Act (POPI)
  • Internal Revenue Service (IRS) Publication 1075
  • New York Cyber Security Regulation (23 NYCRR 500)
  • General Personal Data Protection Act (LGPD)
  • New York Department of Financial Services (NYDFS)
  • FTC Safeguards Rule

With technology and cybersecurity threats evolving quickly, all businesses must know how to evaluate and handle risks effectively. Let’s explore the key parts of risk assessments and management and provides practical tips to improve security measures and make better choices.

What is a Risk Assessment?

A risk assessment is a component of risk management that examines possible cyber threats (frame), their likelihood of occurring and level of risk (assess), influences the design of risk responses (respond), and creation of monitoring strategies (monitor) within your organization.

These assessments are a critical first step that helps decide where to use resources and personnel to reduce cybersecurity risks and minimize vulnerabilities. Identifying an organization’s risks sets the stage for a comprehensive risk management program. This proactive risk assessment approach allows for targeted risk management training and a shift from reactive to proactive strategies.

Steps for an Effective Cybersecurity Risk Assessment: What is a Risk Assessment?

Why are Risk Assessments Essential?

Risk assessments are essential for institutions across all industries and cybersecurity professionals alike. They allow for informed decision-making, leading to better resource allocation and a more efficient means of threat handling. When a risk assessment is performed, it helps identify potential risks within an organization by laying down a foundation for a risk management strategy and highlighting areas where training and improvement are needed. Being proactive regarding possible risks and vulnerabilities is imperative for organizations to stay ahead of threats and mitigate security gaps.

Carrying out risk assessments consistently ensures that organizations stay on top of applicable risks and compliance regulations, especially as the technical business environment evolves.

Cybersecurity professionals prioritize risk assessments for several key reasons:

  1. Legal and Regulatory Compliance: Regular risk assessments are not just a recommendation but a requirement in many fields. For instance, in the U.S. healthcare sector, it is legally mandated to evaluate risks. This necessity can span various industries, including legal, retail, and manufacturing, each with guidelines or obligations for periodic risk evaluation.
  2. Best Practices: Recognizing and managing cybersecurity risks is crucial to protecting assets and information. It is a fundamental practice in cybersecurity to measure and understand risks and manage them effectively. This understanding helps defend against potential threats more efficiently and promptly.
  3. Alignment with Business Goals: Conducting risk assessments ensures that security measures align with the business’s broader objectives. This alignment aids in utilizing resources more effectively and supports the organization’s overall goals. Business leaders often better understand risk management and specific technical vulnerabilities, making risk assessments vital in bridging this knowledge gap.

Understanding why risk assessments are essential, and the benefits they bring, is the first step towards developing a robust risk management strategy. This strategy not only safeguards against potential threats but also aligns with the overall objectives of your business, ensuring growth and stability in an ever-changing digital environment.

Boosting Security with a Formal Risk Assessment Process

Transitioning from an informal approach to a formal risk assessment process is pivotal for organizations. It is not just about following procedures; it significantly improves risk management. For the reasons outlined below, adopting a formal risk assessment process is crucial for security professionals.

Benefits of a Formalized Risk Assessment Process

Security departments that are knowledgeable and informed regarding vulnerability remediation but do not have defined risk assessment processes may find the journey from recognizing gaps to implementing a structured risk assessment process overwhelming at first glance. Organizations often realize they have been spotting risks and identifying vulnerabilities throughout the environment, even in areas lacking defined processes. This emphasizes an important point: security personnel naturally identify risks; however, these risks can go undocumented and unaddressed without formalizing the risk assessment process. Formalized risk assessment processes make identifying vulnerabilities and their remediation efforts even more effective.

Communicating Risks to Leaders

The main goal of risk management in cybersecurity is not to stop business projects but to provide crucial information for executive decision-making. With structured risk assessments, insights into security vulnerabilities become extremely valuable for informing key decision-makers and business leaders. This communication ensures that decisions are made with an awareness of risks, a deep understanding of what those risks mean, and a recognition of the inherent dangers associated with those risks.

Six Essential Steps for Establishing an Effective Cybersecurity Risk Assessment Process

A formal risk assessment involves recording everything associated with the risks of a workplace or environment. A great resource for learning how risk assessments are performed is The National Institute of Standards and Technology’s Guide for Conducting Risk Assessments. At a high level, the steps to create a formal risk assessment process are as follows:

Step 1: Identify Risks

Identifying risks involves recognizing potential risks associated with new IT developments, business projects, or significant organizational changes. This includes classifying potential threat sources such as adversarial, accidental, structural, and environmental threats, and determining relevant threat events.

To identify risks effectively, organizations should list potential threat sources and determine specific threat events, such as phishing attacks or natural disasters. This comprehensive process ensures that all possible risks are recognized for further analysis.

Step 2: Identify Vulnerabilities

Identifying vulnerabilities helps understand how threats can exploit weaknesses within an organization. This step assesses existing gaps in security posture and conditions that might make the organization susceptible to attacks or failures.

Organizations should conduct a current state analysis against security frameworks like NIST CSF and perform technical penetration testing. Using NIST 800-30 Appendix F, classify and understand vulnerabilities comprehensively.

Step 3: Evaluate the Risks

Evaluating risks involves analyzing identified risks to understand their potential impact and prioritizing them based on likelihood and impact. This step enables organizations to allocate resources effectively and focus on the most significant threats.

To evaluate risks, estimate the likelihood of each threat event resulting in a loss and assess the potential impact using NIST 800-30 guidance. This dual analysis provides a clear picture of the organization’s risk landscape.

Step 4: Calculate Risk

Calculating risk quantifies the potential impact and likelihood of identified risks, helping prioritize them for mitigation. This step combines evaluations to generate a risk value, guiding strategic risk management efforts.

Use a 9-block matrix to combine likelihood and impact values, as detailed in NIST 800-30 Appendix I. This systematic approach ranks risks from high to low priority, ensuring the most critical are addressed first.

Step 5: Mitigate the Risks

Mitigating risks involves developing and implementing strategies to manage and reduce identified risks, protecting the organization from potential threats. This step ensures the organization can maintain operations and security posture.

Develop comprehensive risk mitigation plans addressing high-priority risks, including specific actions like implementing security controls and training staff. Regularly review and update plans to adapt to changing threats.

Step 6: Communicate the Risks

Communicating risks ensures all stakeholders are informed about the organization’s risk landscape and mitigation strategies, fostering a risk-aware culture. Effective communication supports risk management efforts at all levels.

Create comprehensive risk assessment reports and share them with leaders and stakeholders through regular briefings. Clear, concise communication ensures understanding and agreement on risk management strategies.

The goal is not to have every suggestion accepted but to ensure that a comprehensive understanding of the risks and vulnerabilities involved informs every decision.

Going Beyond Compliance

While meeting regulatory standards is essential, the true purpose of a risk assessment is to assist management when making informed decisions about the security practices necessary for the organization. This perspective shifts from checking boxes for compliance checklists to actively securing organizational assets and information.

Adopting a formal risk assessment process marks a significant step forward for any security team. Risk assessments structure how risks are spotted, analyzed, and communicated, thus improving the decision-making process throughout the organization. This change is not about adding more paperwork but is about strengthening security’s strategic role while navigating a complex risk environment. An assessment invites security professionals to respond to risks, actively manage and reduce risks, and guide the organization through careful planning and foresight.

Risk Assessment vs. Risk Management

For cybersecurity employees and personnel, figuring out the distinction between a risk assessment and risk management can be tricky. For clarity, these can both be defined as:

  • Risk Assessment: A risk assessment is used to figure out how probable an incident is to happen and how severe it could be if it does. One key word in that definition is “probable” – the possible frequency and magnitude. Estimating probability is a key concept when dealing with risk.
  • Risk Management: Risk management focuses on addressing and managing risks from identification through remediation. This process includes identifying risks, examining their impact, deciding on the best actions to resolve the issue, and evaluating the root cause. To manage risks effectively, personnel should follow a set plan or framework that guides the entire process.

While risk assessments are about identifying potential problems and their impact, risk management takes it further by actively addressing and handling those risks through a comprehensive approach.

Risk Management: Effective Risk Remediation Strategies

Risk remediation, a crucial part of managing risks, is about addressing risks, whether from outside or inside an organization. Risk remediation includes multiple ways to reduce, avoid, accept, or pass risks off to someone else. A few ways in which risks can be addressed include:

  1. Avoidance: The avoidance method involves staying away from risky activities. By not getting involved in certain things, organizations can dodge inherent risks.
  2. Acceptance: Organizations must recognize that certain risks exist in doing business. Companies cannot stop these risks but must prepare to deal with what happens when one of these risks presents itself.
  3. Mitigation: This strategy involves implementing measures to lessen the impact of risks. These measures could include safety steps, procedures, or protections.
  4. Transfer: With this strategy, organizations let someone else take on the responsibility of identified risk. This is often done through insurance, agreements, or cybersecurity insurance.

Risk Assessment Best Practices

Waiting for a flawless way to identify and measure all risks means that many risks will be ignored too long. There are several essential practices that most organizations should consider, no matter what industry they are in or what rules they need to follow. A few of these are:

  1. Organizations should understand that any type of risk assessment is better than none. When prioritizing risks, concentrate on how likely a threat will occur and the potential damage it could cause the organization. To simplify, think of risk assessments as the likelihood of the danger happening multiplied by its potential impact, which equals the level of risk. After evaluating each threat, those identified as the most critical by the management team and business leaders should be addressed first.
  2. It is crucial to evaluate these risks consistently over time. Organizations should avoid switching between different measurement methods, as this could lead to an inaccurate understanding of risks and make tracking progress impossible. A steady, defined, documented process and rating system for each assessment will ensure consistency when gathering the necessary information to guide each organization effectively. Ultimately, helping the management team and business leaders make informed decisions about security risks is the most vital role a risk assessment can play. Once a quantitative method for assessing risk is established, consistency ensures reliable comparisons over time, facilitating effective decision-making. Deviating from the chosen method can introduce inconsistencies and undermine the accuracy of risk evaluations. Maintaining the chosen quantitative approach fosters familiarity among stakeholders, streamlining communication and enhancing the organization’s risk management effectiveness.
  3. Companies should be proactive about upcoming changes in risk factors and regulatory requirements that impact their organization. Engaging with local or national industry associations is an excellent strategy. Security professionals can learn about upcoming changes through these associations, allowing them to prepare in advance. Industry publications are also a valuable resource, as journalists often report on impending changes before they occur. Attending conferences and events is another beneficial approach, offering direct interaction with those involved in industry shifts and a chance to discuss these changes with peers in a casual setting.

Risk Assessments Should Add Value

Security risks are seldom the top concern for an organization. Security professionals sometimes forget that the executive team has other priorities and responsibilities. Other business factors may influence the significance of security vulnerabilities and how the suggestions are received internally. Security professionals should try to see the bigger picture as much as possible. Once the security risks are shared with the leadership team, they must trust that they have fulfilled their responsibilities. Providing high-quality information, rather than just technical jargon, to those who might not grasp it ensures that risk assessments continue to add substantial value to the organization.

LBMC’s Risk Assessment Process

LBMC’s process for assessing risk focuses on the main aspects of cybersecurity. The steps LBMC utilizes for performing a risk assessment are:

  • First, LBMC talks to and interviews the critical staff responsible for managing IT security and privacy.
  • Next, LBMC will review the security rules, procedures, IT systems, records, and training content to compare them to the rules and regulations for each applicable industry.
  • LBMC then performs automated and hands-on testing to check the information security system and spot potential problems.
  • After gathering all this information, LBMC compiles a report on the current landscape and determines how the organization complies with other essential security standards and regulations.
  • Finally, LBMC will provide a summary report for executives. This report clarifies the company’s progress toward strengthening its defense against cybersecurity threats and meeting legal requirements.

The LBMC methodology combines aspects of:

  • NIST SP 800-30 Rev 1, “Guide for Conducting Risk Assessments.”
  • Industry threat identification resources.
  • Guidance disseminated by regulatory authorities
  • NIST CSF Informative References
  • Real-world experience conducting assessments for organizations in various industries, sizes, and security postures. Software solutions are also available to streamline your risk assessment process with an intuitive, automated tool.

Controlling Risk Management & Assessment Processes

Understanding every part of risk management might seem overwhelming, but it’s manageable. Please contact LBMC Cybersecurity today to schedule your risk assessment or discuss your needs.