Cyberattacks are not random occurrences but rather stem from unresolved risks. Any functioning network can be susceptible to threats. Rather than waiting for hackers to exploit vulnerabilities in your system, it is advisable to take a proactive approach by assessing both the inherent and residual risks.
By comprehending the inherent and residual risks present in your network, you can gain valuable insights into how to improve its security. What exactly are these risks, and what measures can you take to mitigate them?
What are Inherent Risks?
Inherent risks refer to the potential vulnerabilities and threats that exist within a system or organization when there are no security controls or measures in place. These risks arise due to various factors, such as the design of the system, the software or hardware used, or even the nature of the business or operations.
Inherent risks can be identified through a risk assessment process that evaluates the potential threats and vulnerabilities that exist within the system or organization. Examples of inherent risks may include weaknesses in software applications, lack of access controls, or inadequate data backup and recovery procedures.
To mitigate inherent risks, security controls and measures can be implemented to reduce the likelihood and impact of a potential attack. However, it is important to note that inherent risks cannot be completely eliminated, and organizations should continue to monitor and reassess their security posture to ensure that any emerging vulnerabilities are addressed promptly.
Inherent risks refer to the vulnerabilities in your network that exist when there are no security policies, procedures, or protocols in place to deter threats. However, since it is impossible to measure something that does not exist, it is more accurate to say that inherent risks are the vulnerabilities in your network when it is operating under its default security settings.
For instance, consider the doors in your house. If you do not install locks on them, intruders can easily gain entry as there is no obstacle in their way. This is similar to the vulnerabilities in a network that lacks proper security measures.
What are Residual Risks?
Residual risks are vulnerabilities within your system after you implement security measures including procedures, processes, and policies to protect your valuables. Even though you have set up defenses to resist cyber threats and attacks, certain risks could still arise and impact your system.
Residual risks point out that security isn’t a one-off activity. Putting locks on your doors doesn’t guarantee that criminals can’t attack you. They could find ways to either open the locks or break down the doors even if it means going the extra mile to do that.
Residual risks are the remaining risks that persist even after implementing security controls or measures to mitigate inherent risks. These risks are present due to various factors such as the inability of the security controls to completely eliminate the vulnerabilities, the evolution of new threats that were not present earlier, or even human error or negligence.
Residual risks can be minimized through regular monitoring and assessment of the network’s security controls, as well as implementing additional controls or modifying existing ones to address any new vulnerabilities that may emerge. It is important to note that residual risks cannot be entirely eliminated, but they can be reduced to an acceptable level through continuous risk management and security measures.
Inherent and Residual Risks in Cybersecurity
In summary, inherent risks refer to the potential risks that exist in your system when there are no security defenses in place, while residual risks are the risks that may persist even after implementing security measures. A comparison of the security implications of these risk categories can reveal further differences between them.
Effect of Inherent Risks
The common implications of inherent risks include:
Data Loss Due to Lack of Security
To ensure effective data protection, strong and intentional security controls are necessary. Relying on default security settings alone is insufficient in guarding against calculated cyberattacks.
Cybercriminals are constantly seeking potential targets, and inherent risks expose your assets to these attackers. The absence of robust security measures makes it easier for them to infiltrate your network and steal your data without encountering significant obstacles.
Non-Regulatory Compliance
There are several regulatory standards in place to safeguard user data. As a network owner or administrator, it is your responsibility to adhere to these regulations to ensure the security of your users’ data.
Failure to establish policies that guide compliance with regulatory requirements in your industry can expose your network to inherent risks. The lack of policies for user engagement may result in compliance violations, which can lead to sanctions, lawsuits, and penalties.
Network Breach Due to a Lack of Access Control
At its core, protecting your data involves implementing access controls to monitor who has access to specific information. Inherent risks often stem from a lack of access controls on systems. Without proper management of access levels among users, anyone can potentially access and compromise your most sensitive data.
Effect of Residual Risks
Here are some common implications of inherent risks.
Malware Attacks
Merely implementing security measures on your system does not guarantee protection against cybercriminals, who may utilize unsuspecting techniques such as phishing attacks to lure you into taking actions that compromise your system with malware.
Malware typically contains viruses that can bypass your system’s security, granting the attacker access and control. This is considered a residual risk, as it can occur despite the presence of strong defenses.
Insider Threats
Not all cyber risks are external, as threats can originate from users within your network. Despite installing security defenses, deliberate or accidental actions by insiders can occur and compromise your network.
Insider threats are a component of residual risks, as they can circumvent existing security measures, particularly when those measures are focused on external factors and neglect internal ones.
Third-Party Applications
When you connect third-party applications to your system, you create new entry points for potential attacks, regardless of any existing defenses you may have in place. These devices expand your attack surfaces, and since you have limited control over them, there are limitations to what you can do to secure them.
Threat actors may examine open ports within your system to identify the most vulnerable entry points to exploit. They may use techniques like man-in-the-middle attacks to intercept communications without disrupting your operations.
How to prevent Inherent and Residual Risks
Although inherent and residual risks may differ, both can pose significant threats to your network if left unaddressed.
To prevent these risks and ensure a more secure network, consider the following measures:
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Classify Risks Into Categories
When it comes to risk assessment, risk classification is crucial in establishing both qualitative and quantitative metrics. In order to properly address inherent and residual risks, it is important to identify and categorize the attributes of each risk type.
For residual risks, it is important to implement security measures to protect the affected areas rather than leaving them unprotected. Mitigation strategies should also be established, such as an effective incident response plan to address any attacks that may bypass your defenses.
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Conduct Risk Assessment
Risk assessment is the process of identifying, evaluating, and quantifying the various risks that exist within your network and the potential impact they could have. This includes identifying your assets and assessing their level of exposure to cyber threats and attacks.
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Understanding your cyber risks enables you to develop effective strategies for risk prevention and implementing security measures tailored to address the specific risks identified in your assessment.
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Standardize Risk Prevention Controls
Using standard security frameworks such as NIST Cybersecurity Framework, ISO 27001, and the Health Insurance Portability and Accountability Act (HIPAA) is an effective way to address cyber risks. These frameworks have been tested and proven, and they provide a basis for measurement and automation.
In the case of inherent risks, these frameworks can provide a solid foundation for implementing security controls from scratch, given the absence of substantial security. For residual risks, the frameworks can be used to identify and address any loopholes or weaknesses in the existing security structure.
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Create a Risk Register
To a large extent, cyber risks are inevitable, and how they impact your system depends on your actions. Your knowledge of past cyber incidents can enhance your ability to manage present and future risks.
If a risk register exists, look for the cyber incident history. If there is none, gather information from helpful sources to create one.
The risk register should contain details of previous cyber risks and the measures taken to resolve them. Effective measures can be implemented again, but ineffective ones should prompt you to seek new and improved defense strategies.
Avoid Inherent and Residual Risks with holistic Cybersecurity measures
Comprehensive security should be the foundation of your security infrastructure. By considering all aspects of your system in your security efforts, you can address both inherent and residual risks.
Integrating a strong cybersecurity culture with effective processes and technology will enable you to mitigate risks to the greatest extent possible.
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