In recent years, companies are relying more and more on technology during their daily operations. Technology has been good in improving performance and efficiency in an organization. The advancement in technology has seen companies storing more and more personal information about their customers in a central place. This has brought new risks in institutions that have large personal information databases. Malicious parties seek to access your client’s information dishonestly and probably use it for their personal gain. Financial institutions were among the first victims of system hacks for client information and they became conscious of the risk. This made the institutions vigilant by implementing the necessary controls and security systems to combat hacking. These perpetrators the sought out less secure institutions.
Why are companies exposed to information security risks?
Some companies use software that hasn’t been in use for years. For many years, insurance companies and small businesses were low-risk entities. No one considered security measures until banks started using state of the art security systems then insurance companies and small businesses became easier targets. Since then less secure companies have been trying to upgrade to the latest security systems. The process is taking longer because of the large data they have. In the meantime, there have several risk exposures.
IT risks facing companies
Cybercrimes are increasing every year and there are no governing laws about cybercrimes. The most common cybercrime is hacking to steal personal information. Although nowadays it is easy to prove unauthorized access, it is still hard to trace the culprits. Insurance companies are easy targets for cybercrimes because of poor security measures. The risk mitigation measure for this is to upgrade the company’s security measures. A system with several authorization levels works best in limiting information to authorized personnel only. In addition, confidential client information can be moved to more secured servers or secure cloud storage.
In 2016, a lot of celebrities’ cloud accounts were hacked and personal information leaked to the public. The cloud storage companies were sued for damages caused by the leaked information. Any institution that stores personal data of its clients is expected to have protection measures in place to keep the information confidential. Lawsuits arise when the information provided is used for other purposes. For example, some employees may copy your clients’ details and use that information to defraud the clients.
Identity theft has become a serious crime these days. It is also very expensive since the perpetrator can transfer all the savings from the bank accounts they access. The information provided to your company by your customers about their life can be used to create alternate identities. These identities then proceed to access your assets and other property. Identity theft is emotionally and financially painful for people. Keep the information about your clients in secure servers and limit the number of users who can access the information.
When businesses converted their operations to become digital, they were exposed to the risk of extortion using system malware. There are malicious parties who infect company servers with malware then demand for ransoms to restore the servers. Alternatively, information may be stolen from your servers and the thieves demand a ransom to return the information. These ransom demands only keep increasing once the company pays. The best course of action is to find a good antivirus and firewalls to keep unwanted access and viruses at bay.
Customer expectations not being met
Customers these days expect to receive high quality service with the click of a button. They expect all services to be accessible via mobile phones. A gap in technology in your company may cost you a portion of your profits. It is expensive to keep up with technology but the cost of lagging behind is a loss of income. Companies are facing a major challenge in an attempt to keep up with technology in order to maintain their market share.
What should companies do?
There are frameworks like the National Institute of Standards and Technology’s Risk Management Framework, NIST RMF, which has proven research on strategies to manage risks associated with technology. Committee of Sponsoring Organization of the Treadway Commission Cybersecurity Framework, COSO CFS, offers a framework to make controls and offers proven data that can assist in decision making. These frameworks offer guidelines on how to identify and deal with risks associated with IT. There are five main steps that can be used to establish controls and procedures to mitigate risks in an organization, namely:
- Establish organizational objectives
- Risk assessment
- Determine the organizations risk tolerance
- Create internal and external controls and policies
- Review and KPIs
Importance of risk mitigation
Risk mitigation is done to ensure business continuity, profitability, and good performance. A risk is anything or activity that may cause a business to incur a loss. Risks that are not mitigated may cause the company to collapse. It is therefore important for a company to be aware of potential risks from both the internal and external environment. When your company is fully aware of the potential risks then you are in a position to put controls in place to deal with the risk. You need to train your employees on how to avoid potential risks as well as how to deal with them when they actualize.
Risk mitigation is a practice that has been around for a long time. It has gained popularity in recent because of emerging risks that are associated with the advancement in technology. This has seen compliance bodies become keen on the security of payment consumer information. This is the information that customers provided when online payments. The protection of consumer information, as well as business information, has become a high priority for businesses and compliance bodies. It is also important in gaining the customers trusts. Customers feel safe when they know their personal details are protected.
Ken Lynch is an enterprise software startup veteran, who has always been fascinated about what drives workers to work and how to make work more engaging. Ken founded Reciprocity to pursue just that. He has propelled Reciprocity’s success with this mission-based goal of engaging employees with the governance, risk, and compliance goals of their company in order to create more socially minded corporate citizens. Ken earned his BS in Computer Science and Electrical Engineering from MIT. Learn more at ReciprocityLabs.com.