Cyber Risk Management: What You Need To Know

26 Feb, 2025, 13 min read

Cyber threats are no longer a distant possibility; they’re a daily challenge for businesses of all sizes. Hackers are constantly finding new ways to break into systems, and organizations without a strategy often find themselves reacting after an attack has already caused damage.

However, trying to cover everything simultaneously is unrealistic, expensive, and often ineffective.

That’s why cyber risk management is so important. Instead of blindly investing in security tools or reacting to every potential threat, you need to take a risk-based approach to focus on efforts where it counts.

Cyber risk management helps you pinpoint the vulnerabilities that pose the biggest risk to your organization, whether through a weak access control system, outdated software, or unsecured cloud environments. This way, you can address them before they become a full-blown crisis.

Now, let’s look at cyber risk management, its importance, and its benefits.

What Is Cyber Risk Management?

Cyber risk management is a process that keeps your organization's IT systems, networks, and data safe from threats. It's an ongoing process of identifying risks, analyzing vulnerabilities, and putting measures in place to prevent cyberattacks.

Most companies don’t have full visibility into how cybercriminals operate, their own weak spots, or the risks of human error and unexpected events like severe power outages.

And not all cyberattacks cause the same damage. A data breach in healthcare can cost over $10 million, while the hospitality industry sees an average loss of $2.9 million, according to IBM’s Cost of a Data Breach report.

That’s why cybersecurity experts, including NIST (National Institute of Standards and Technology), recommend treating cyber risk management as a continuous process rather than a one-time fix.

Threats evolve, technology changes and new vulnerabilities emerge. Revisiting your security measures regularly helps you stay ahead of the game and adapt to new risks before they turn into costly disasters.

Importance of risk management in cybersecurity

Cyber risk management is important because cyber threats are evolving fast, and no big or small company is off the radar.

Even the biggest corporations with massive customer bases have fallen victim to attacks that led to data breaches, financial losses, and brand damage. And relying solely on antivirus software? That’s just scratching the surface. Let’s take a look at the importance of risk management in cybersecurity:

Stopping attacks before they happen

Cyber risk management prevents threats in the first place. A good risk management plan helps identify vulnerabilities, assess threats, and implement the right defenses. If you have a strong risk treatment plan, you can reduce the likelihood of cyberattacks before they even reach your systems.

Protect revenue and avoid costly mistakes

Cyberattacks hit where it hurts most: the bottom line. Many attackers are financially motivated, and their tactics can cripple your company’s revenue stream. Implementing a cyber risk strategy helps minimize these threats and prevent costly downtime.

Build a reputation that customers trust

When you invest in robust cybersecurity and risk management, you demonstrate to your customers that their data is in safe hands.

This commitment protects your business from potential threats and sets you apart in the market, earning your trust and encouraging long-term customer loyalty.

Cyber Risk Management Frameworks

Cyber risk management frameworks provide structured guidelines for identifying, assessing, and mitigating security threats, so you don’t have to create it from scratch.

These frameworks help implement best practices, comply with regulatory requirements, and build resilience against cyber threats.

Here are some widely recognized cyber risk management frameworks that organizations use to strengthen their cybersecurity posture:

NIST Cybersecurity Framework (NIST CSF)
ISO/IEC 27001
CIS Critical Security Controls (CIS CSC)
COBIT (Control Objectives for Information and Related Technologies)
HITRUST CSF
FAIR (Factor Analysis of Information Risk)
SOC 2 (System and Organization Controls 2)
GDPR (General Data Protection Regulation) Compliance Framework
PCI DSS (Payment Card Industry Data Security Standard)
Cybersecurity Maturity Model Certification (CMMC)

For example, NIST CSF offers a flexible, risk-based approach to managing cybersecurity, making it ideal for businesses of all sizes. ISO 27001, on the other hand, provides an internationally recognized standard for information security management, ensuring that organizations have a solid foundation for data protection.

Cybersecurity Risk Management Plan

A cybersecurity risk management plan is a detailed plan you create based on your organization's data, systems, and infrastructure. This plan will make identifying, assessing, and mitigating cybersecurity threats easier. You can start creating a plan by referring to the cybersecurity risk management frameworks listed above.

The key components of the plan are as follows:

Key Components of a Cybersecurity Risk Management Plan:

Risk identification: Recognizing potential cyber threats, including insider threats and system vulnerabilities
Risk assessment: Evaluating the likelihood and impact of each identified risk on the organization
Risk mitigation strategies: Implementing technical and procedural controls such as firewalls, encryption, access management, and employee training
Incident response plan: Establishing protocols for detecting, responding to, and recovering from cyber incidents
Compliance and regulatory requirements: Ensuring adherence to industry standards and frameworks like NIST CSF, ISO 27001, GDPR, and PCI DSS
Continuous monitoring and improvement: Regularly assessing the effectiveness of security controls and updating the plan to adapt to emerging threats

How to Build an Effective Cyber Risk Management Process?

Cyber risk management is an ongoing process that typically involves four key steps. Let’s take a look at them:

Step 1: Identify the risks

Before you can protect your business, you must know what you protect it from. This step focuses on spotting potential threats and vulnerabilities before they become real problems.

Watch out for:

Cyber threats like malware, ransomware, and phishing attacks that could steal or corrupt sensitive data
Network vulnerabilities, such as unpatched software or weak passwords that hackers can exploit
Human errors, like misconfigured security settings or accidental data leaks
Environmental risks, such as natural disasters that could impact servers, connectivity, or data centers

How to identify the risks:

Conduct regular risk identification workshops with IT and security teams
Use penetration testing and vulnerability scans to uncover weak spots in your network
Keep an updated inventory of all digital assets, including software, databases, and cloud services

Step 2: Analyze the risks

Once you’ve identified the threats, the next step is to understand how likely they will happen and how much damage they could cause.

How to assess risk levels:

Use a risk assessment matrix. Plot threats on a grid that measures likelihood (low to high) vs. severity (low to high)
Consider historical data: has this kind of breach or attack happened before in your industry?
Factor in financial, reputational, and operational impact. How badly would each risk affect your business?

Step 3: Manage the risks

Once you’ve analyzed the risks, it’s time to decide how to handle them. Not every risk needs the same level of attention, some can be mitigated, while others may need to be accepted or transferred.

Some of the risk treatment options you can consider are:

Avoid the risk: Stop using a risky service or tool altogether
Reduce the risk: Strengthen security controls like multi-factor authentication (MFA) or encryption
Transfer the risk: Get cyber insurance to cover financial losses from a potential breach
Accept the risk: If the cost of prevention outweighs the potential damage, some risks should just be monitored instead

How to implement this step:

Develop a cybersecurity policy that clearly outlines controls and protocols
Conduct employee security training to reduce human-related risks
Work with third-party security experts like Atlas Systems to ensure all systems follow best practices

Step 4: Review the risks

In cybersecurity, no situation is static. Risks change, and your security measures need to evolve with them. Continuous monitoring ensures you keep up with new threats, emerging vulnerabilities, and compliance updates.

Key areas to track include:

Are current security controls effective? If not, adjustments need to be made.
Are employees following security best practices? Regular training can reinforce good habits.
Are there new threats emerging? Cybercriminals are always evolving their tactics.

How to implement this step:

Set up real-time monitoring tools to detect unusual activity in your systems
Schedule quarterly cybersecurity audits to assess how well security measures are working
Have a risk communication policy and regularly update leadership and teams about cyber risks and responses

Benefits of Cyber Risk Management

A single attack can lead to financial loss, legal trouble, and a damaged reputation that can be difficult to recover from.

That’s why cyber risk management is not optional, and let’s see the benefits:

Stay on the right side of regulations

If your business handles sensitive data, you may need to comply with cybersecurity regulations like GDPR, HIPAA, or PCI DSS. Falling short can result in hefty fines, legal trouble, and loss of customer trust.

A strong cyber risk management plan keeps your security measures up to standard, ensuring you stay compliant and avoid unnecessary penalties.

Protect your profits from unexpected cyber attacks

Cyberattacks drain your bank account. The costs of a breach can pile up fast: network recovery, lost data, legal fees, fines, and even customer refunds.

And if your business operates online, a cyberattack could shut down your website, instantly cutting off revenue.

Investing in cyber risk management upfront can save you from massive financial losses later. A well-structured plan helps you detect threats early, patch vulnerabilities, and reduce the risk of devastating cyber incidents.

Earn (and keep) customer trust

Customers confident that their data is secure will likely stick with your business. Hence, when you invest in robust cyber risk management, you protect sensitive information and build a foundation of trust that translates into customer loyalty and long-term revenue growth.

This means fewer disruptions, a stronger reputation, and a steady stream of returning customers.

Best Practices Of Cyber Risk Management

Here are the best practices you need to follow to have a flawless cyber risk management process:

Best Practices Of Cyber Risk Management

Build a strong governance structure

A strong governance structure ensures everyone, from leadership to frontline employees, understands their role in keeping company data safe. You can implement it by getting executive leadership involved in cybersecurity planning.

Also, clear security policies and responsibilities for each department should be set. Security protocols should be reviewed and updated regularly to keep up with new threats.

Build a security-first workplace culture

A company’s best defense is an aware and proactive workforce. Cyber risk management makes sure employees follow them.

Here’s how you can implement it:

Offer regular cybersecurity awareness training
Encourage employees to report suspicious activities
Make security best practices part of everyday workflows

Assign clear responsibilities to every team

Keeping systems secure is not isolated to just the IT department. Cyber threats can come from anywhere, so every department should have specific responsibilities to handle security risks.

Here’s how you can implement it:

Clearly define who is responsible for monitoring threats
Assign action plans for different departments in case of a breach
Ensure leadership holds teams accountable for security measures

Train your team to recognize and respond to threats

Employees can be your strongest defense or your weakest link. Without proper training, even the best security systems will not help.

Here’s how you can implement it:

Educate employees on phishing attacks, password security, and safe browsing habits
Simulate cybersecurity drills to test response readiness
Provide clear guidelines on how to report security concerns

Conduct regular risk assessments

Understanding where your vulnerabilities are is the first step to fixing them. Regular risk assessments help businesses find weaknesses before hackers do.

Here’s how you can implement it:

Take inventory of all digital assets and sensitive data
Identify potential risks like hacking, ransomware, or insider threats
Rank risks based on likelihood and impact to prioritize security measures

Atlas advantage:

Atlas provides an IT Risk Assessment that thoroughly analyzes all the risks associated with your IT environment, focusing on threat response capabilities, data security, and compliance needs.

This way, you can ensure your business remains secure and resilient in the long run, reinforcing the trust that keeps your customers coming back.

Have a plan for the worst-case scenario

No system is foolproof. Businesses need an Cyber Incident Response and Business Continuity Plan to keep things running despite an attack.

Here’s how you can implement it:

Develop a step-by-step incident response plan for cyberattacks
Test and update recovery strategies regularly
Ensure backups are secure and easily restorable in case of data loss

Challenges In Cyber Risk Management

Some of the top challenges you will face under cyber risk management are :

Cyber threats constantly change, making it difficult to avoid new attack methods
Employees may unintentionally expose the organization to risks due to poor security habits
Vendors and partners with weak security can become entry points for cyber threats
Meeting various regulatory requirements (e.g., GDPR, HIPAA, PCI DSS) can be overwhelming
Smaller organizations often struggle with the costs of implementing strong cybersecurity measures
Malicious or negligent employees can lead to data breaches and security incidents
Securing large volumes of sensitive data while ensuring availability and integrity is complex
Merging cybersecurity tools with existing IT infrastructure can create security gaps
Without a response plan, organizations struggle to contain and recover from cyberattacks
Finding and retaining qualified security experts is a persistent challenge
While cyber insurance provides financial protection, policies can have exclusions that limit coverage
Attacks targeting software and hardware supply chains can have widespread consequences

How Do We Overcome The Challenges?

As we have seen above, cyber risk management has its fair share of challenges, from evolving threats to compliance complexities. However, investing in an experienced cybersecurity and IT risk management solution like Atlas Systems is the best way to manage and overcome these.

Atlas Systems helps strengthen your cybersecurity and risk management with the following solutions:

Managed detection and response (MDR): 24/7 monitoring, rapid threat detection, and expert-led incident response
Threat and vulnerability management: Continuous risk assessment, automated scanning, and strategic mitigation recommendations
Cloud and API security: Real-time monitoring, data protection, and prevention of unauthorized access in cloud environments
Application security: Secure software development with vulnerability detection, patching, and protection against common cyber threats
Identity and access management (IAM): Strong authentication controls, secure user provisioning, and anomaly detection for access governance

Try Atlas Systems For Your Cyber Risk Management Needs

Cyberattacks are rarely random. There are often clear signs indicating that an organization may be targeted, such as discussions about the organization on the dark web, registrations of similar domain names used in phishing attempts, or even confidential information like user credentials being offered for sale.

At Atlas Systems, we recognize that your business data is extremely valuable. Our AI-driven cybersecurity risk assessment module is designed to help you protect that data.

We offer a vulnerability assessment that identifies potential security gaps before exploiting them. Our penetration testing simulates real-world cyberattacks to reveal any weaknesses in your defenses.

With our IT risk assessment, we analyze your entire IT environment to pinpoint risks and help you comply with regulations, ensuring your business remains secure.

Atlas Systems is here to be your trusted partner in cybersecurity, backed by over 20 years of experience, a global client base, and more than 100,000 assessments conducted.

Get in touch with us to know more.

FAQs About Cyber Risk Management

What are the risk treatments for cybersecurity?

To handle cybersecurity risks, organizations use four main treatments: acceptance (acknowledging risks without action), avoidance (eliminating risks), transference (shifting risks, like through insurance), and mitigation (reducing risk impact).

What are the methods of cyber risk management?

Methods to assess risks include qualitative analysis (judging risks based on likelihood and impact), quantitative analysis (using data to measure risks), threat modeling, deterministic assessments, and asset-based approaches (focusing on protecting key assets).

What is people risk management?

People risk management is an approach that organizations use to monitor and handle potential issues involving employees, managers, or any other individuals within the company. Its goal is to address these concerns in a way that doesn't harm the organization's performance, reputation, or overall success.