Defining a risk tolerance threshold is critical for identifying a security goal state and gaining stakeholder support. There is no uniform security risk model template since organizations are motivated by different objectives, including compliance, customer security needs, and IT system security threats.
In this blog, we will explore risk tolerance levels, the factors that influence them, and how to assess your organization's security pressure posture.
What is Risk Tolerance Level?
Risk tolerance is an organization's overall willingness to accept and deal with risks or uncertainties that could hurt its operations, goals, or image. It is a broader idea that takes into account the organization's mindset, strategic goals, and willingness to take risks when making decisions and allocating resources.
On the other hand, risk tolerance levels are specific categories or classes that show how much danger an organization is willing to take. These levels (like low, middle, and high) help organizations measure and talk about how much risk they are ready to face. This helps them put in place the right security measures, controls, and strategies to reduce risk.
An organization’s risk tolerance level should take into account, numerous drivers:
✔️ Compliance drivers
✔️ Privacy risks
✔️ Security threats
✔️ Data and asset value
✔️ Industry and competitive pressure
✔️ Management preferences
💡 Suggestion: Engage in open discussions with senior management or the Board to clearly understand the acceptable levels of data and information protection required.
The conversation must result in clear outputs, such as the organization adopting a moderate risk level after determining that customer and employee information should have a low-risk level. In contrast, non-confidential information can tolerate high-risk levels.
Risk Tolerance Level Descriptions
1. High 🟢
High-Risk Tolerance is for those organizations that are willing to take more risks and tend to be more creative and aggressive when chasing opportunities. They may also be willing to deal with a higher level of uncertainty.
These organizations have no compliance requirements, house no sensitive data, and prioritize innovation and revenue generation over security. These organizations may consider implementing basic security controls and increasing awareness of potential threats to improve security.
2. Moderate 🟡
Organizations with moderate risk tolerance strike a balance between taking risks and maintaining stability. Organizations with a moderate risk tolerance level may operate in government, research, or education industries.
They have some compliance requirements (e.g., HIPAA, PIPEDA) and sensitive data, and their customers may eventually require robust security controls. These organizations should prioritize information security and invest in additional security measures for sensitive data and remote locations to enhance security.
3. Low 🔴
Low-risk tolerance means that an organization doesn't like to take risks and is willing to give up some possibilities in order to avoid negative incidents that can happen. Organizations that don't like taking risks tend to be more cautious and put security and predictability ahead of growth and new ideas.
They have multiple compliance requirements, handle sensitive data, and are expected to maintain strong security controls. To further strengthen security, these organizations should continue investing in advanced security solutions, ensuring visibility for senior management and public investors and securing multiple remote locations.
Assessing Your Security Pressure Posture
An organization’s security pressure posture represents the forces and drivers putting pressure on an organization to develop a strong security program. From assessing your security pressure posture, you can gain a holistic view of how much actual pressure your organization is experiencing to develop an information security program. As the assessment provides rationale and backing to support resource or budget requirements, you can also understand your security pressure points to implement just enough security to achieve your objectives while keeping costs minimal.
Assessing your security pressure posture will answer many board-level questions:
🐞 How attractive is our organization to hackers?
🔒 How much pressure are our customers placing on us for security?
💳 How much pressure is our regulatory and legal requirements really placing on us?
🛡️ What organizational factors are driving our need for security?
Variables that a security pressure posture can be based on:
✔️ Company Industry
✔️ Company users
✔️ Compliance obligations
✔️ Customer security requirements
✔️ Corporate data
✔️ Complexity of technology environment
✔️ Security risk management
✔️ Security incidents
✔️ Physical location profile
✔️ Budget and resource constraints
Risk tolerance levels vary from business to business. It's important to open discussions with senior management or the Board can help clarify acceptable levels of data and information protection required.
Protect Your Business from Cyberthreats.
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