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What Does Risk Mitigation Mean in 2022?

John Sears

John Sears

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Jul 27, 2022

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6 min read

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The Covid pandemic has changed society in many ways. But one of the most compelling shifts that the business world has absorbed is the impact on risk management. The whole field of risk mitigation has been affected by this unprecedented scenario. And most businesses will now need to take steps to mitigate such risks in the future.

One of the most far-reaching impacts of Covid has been the culture of remote work that has resulted. Many business experts and market observers believe that remote and hybrid work models would have emerged anyway. Undoubtedly, Covid has accelerated this trend. The new work model has led to more people working online. And this has resulted in increased cybercrime

300% increase

As an illustration of the trend of increased cybercrime, related complaints fielded by the FBI increased by 300% during the Covid pandemic. And a Gartner survey found that many companies fear cybersecurity and data breaches. Over half of those questioned believed that this is the most increased risk in their organizations.

The World Economic Forum Global Risks Report 2022 concurred. It predicted that digitalization will continue to expose economies to cyber vulnerabilities. And new technologies will enable a more dangerous and diverse range of cybercrimes.

The proliferation of risks is reflected in the continuing growth of ransomware. This crime alone has already escalated to an annual volume of $15 billion. Yet it is not merely coping with ransomware that is significant for businesses. The impact of ransomware can actually be minimal compared to disruption and remediation costs. Indeed, the average downtime for security events exceeds three weeks. This underlines how important it is to mitigate such risks and avoid being hacked in the first place. Risk mitigation has never been more important.

Risk mitigation strategy

It is thus essential for businesses to address problems related to cybercrime and ransomware. One of the best ways to end issues related to cybercrime is to install a risk mitigation strategy. This approach to cybercrime is necessary for the majority of modern companies

So what is risk mitigation? The term “risk mitigation” refers to the efforts of businesses to prepare their organizations for any and all potential risks. At the heart of risk mitigation is a risk mitigation strategy or plan. A risk mitigation strategy assesses and analyzes the impact of all potential risks while also prioritizing planning.

Risk mitigation focuses on implementing steps that can be taken before an event occurs. But it can sometimes examine longer-term effects on business viability as well. The practice prepares organizations for worst-case scenarios. Risk mitigation thus helps to protect companies from harm.

Potential impact

The ultimate aim of risk management is to ensure that risks are eliminated. But any sensible risk mitigation policy will also assess the potential impact of risks if they do indeed occur. Risk mitigation can therefore also be focused on the immediate aftermath of an incident. Steps that can be taken to reduce the effect on business functionality form part of this process.

Typically, several processes are associated with any competent risk mitigation strategy:

  • Risk prioritization
  • Risk quantification
  • Risk response review
  • Tracking risks
  • Monitoring progress

The first of these is to prioritize risks. Prioritization involves identifying which risks are most pressing.

Next, quantifying the level of risk associated with everything that has been identified. Part of this process involves performing a risk assessment, which includes measures, processes and controls that reduce the impact of any risk that comes to fruition.

Prioritization also involves balancing the various departments within a business. This often requires organizations to accept a certain degree of risk in one department. It is then hoped that this will help reduce risk in another prioritized aspect of the business. Achieving balance means assessing the importance of various aspects of the business, ensuring that measures are appropriate for the degrees of risk associated with them.

Tracking risks is another important aspect of any risk mitigation strategy. Tracking enables an organization to understand when the severity or relevance of risks is evolving. Strong metrics are required to track this. And it is always important that the plan meets compliance requirements.

Monitoring progress

Finally, any successful risk mitigation strategy should monitor progress. This step often involves the reevaluation of effectiveness in identifying risk. Any risk mitigation strategy is only as good as its evolution. It is impossible to stand still and hope that an existing risk mitigation plan will remain relevant. The process of monitoring thus involves a diligent process of updating plans. The ultimate aim of this is to reflect changes in risk and shifting priorities.

So why is risk mitigation so important? Firstly, it helps to address the sheer scale of risk that exists in the contemporary business environment. It is also valuable to understand risks rather than taking action against them. The diversity of risks in the modern marketplace means that anticipating them is as important as attempting to prevent them. A risk mitigation strategy is a sophisticated attempt to address these risks. Risk mitigation makes it possible to either avoid risk events or mitigate their impact.

Four pillars of Risk Mitigation

Risk mitigation strategies are built on four pillars:

  • Risk observation
  • Risk identification
  • Risk assessment
  • Risk mitigation

The first of these pillars is monitoring the ability to observe risks within your network and recognizing patterns within them. Observation is the foundation of developing mitigation strategies. Effective observation can address the most serious risks efficiently.

Allied to observation is the identification of potential problems within your supply chain. These problems can include a wide variety of issues. Financial, cyber, compliance, natural hazard, and even geopolitical issues are all important. The severity and importance of these various subsets of risk will be dependent on the particular business and sector. This is why it's important to identify risks to achieve effective prioritization.

The third critical aspect of risk mitigation strategies is the assessment phase. Assessment involves the evaluation of damage that risks will cause if they indeed eventuate. Assessment often includes a risk assessment framework. The assessment process helps businesses to understand which risks are critical, and which are of minimal significance.

The final pillar is the actual process of mitigation. The process of mitigation involves developing plans based on the severity of damage to the supply chain.

Customized strategies

Balancing the various aspects of risk mitigation also results in customized strategies. As a consequence, four different types of risk mitigation are possible. Each of these four approaches aim to achieve different things within an organization. Collectively, though, they will diminish the impact of risk.

The first of the four strategies is avoidance. Risk avoidance refers to a strategy based on implementing all measures that are required to prevent the risk from occurring. This approach may not appear to be the most beneficial and obvious strategy. But balancing risks across various departments and priorities can sometimes be challenging.

An avoidance strategy runs the risk of compromising elements within the business. Thus, it is not suitable for all situations. For example, there could be a risk mitigation approach that requires specialists that are not available. A possible solution is to hire freelance staff, but such an approach will not always be appropriate or possible.

Other risk mitigation approaches exist due to such considerations. One approach that can sometimes be more practical for businesses is a risk mitigation strategy based on reduction. In this approach, steps are implemented with the intention of reducing the likelihood of a risk event, or even the impact should such an event occur. This strategy can be useful in situations where money is tight. Yet the approach still reduces the likelihood of a risk impacting on a business. A reduction strategy in risk management can also take into account more affordable options. This reduction can relate to materials, products, and / or services.

The third common approach for risk mitigation can be described as transference. The transference of risk involves passing the consequences of that risk to a third party. Transference often involves engaging with an insurance company. Hiring contractors, or even outsourcing work completely, are also possible. One of the advantages of this approach is that these third parties can then become liable for any losses. Conversely, it is a less hands-on approach to risk mitigation than other strategies.

The final risk mitigation strategy is acceptance. Accepting a risk is sometimes the only viable option. Dealing with risk may outweigh the benefits gleaned in some circumstances. This process would be most likely to be implemented when a risk is small, or when the negative impact associated with it is trivial. Nonetheless, it's important to track the severity of risks, as the viability of such a plan can change over a period of time.

Nord Security software suite

Dealing with risks in an organization, and addressing the burden of exposure, can be challenging; particularly true in the current cybersecurity environment. This challenging environment means that a suite of powerful services that help deal with risks is valuable. And these qualities are certainly present in the Nord Security suite of software. This collection of programs helps deal with risk mitigation.

The first of these services is NordLocker - a secure, efficient, end-to-end encrypted cloud storage. NordLocker offers sophisticated encryption at all times to ensure that data is out of the reach of nefarious individuals. NordLocker makes it easy to protect your personal data, while also ensuring that your files are always on hand. You can share data between people, groups, and organizations. This means that you can implement NordLocker within your organization and retain data ownership because you control the encryption keys.

Allied to this software is NordPass. This package securely stores passwords with the latest encryption techniques. The encryption algorithm included with NordPass protects your passwords from hackers. The algorithm helps to secure your critical systems. NordPass can autosave and autofill passwords for all accounts and website visits. It can also be synced automatically across several devices. The software also includes a password generator, helping to ensure that the passwords utilized on your system are of the highest quality.

The final plank of the Nord Security data mitigation software suite is NordVPN. The Nord VPN software utilizes encryption to create an extra layer of security for internet infrastructure. NordVPN makes it possible to protect corporate data and manage user access to that data. This ensures that critical information is completely secured.

Summary

In summary, the concept of risk mitigation is an important one for businesses. This is particularly true in a world in which cybersecurity is becoming such a pressing issue. Research published by Mee and Brandenberg in 2020 found that 95% of cybersecurity issues can be traced to human error. As a consequence of this statistic, any automated processes and packages that can help mitigate this human error are valuable. Companies all over the globe are attempting to deal with what is a hostile Internet environment. And Nord Security is playing a valuable role in assisting with this.

John Sears

John Sears

Verified author

John believes that the best things in life are simple. He uses the same approach when he’s writing about online security. John says that his #1 pet peeve is phishing scams. Ironically, his favorite non-work related activity is fishing.