{"id":5854,"date":"2023-04-27T09:04:51","date_gmt":"2023-04-27T14:04:51","guid":{"rendered":"https:\/\/www.stratospherenetworks.com\/blog\/?p=5854"},"modified":"2023-04-27T09:04:51","modified_gmt":"2023-04-27T14:04:51","slug":"how-to-calculate-your-risk-appetite-accepting-the-impossibility-of-flawless-it-security","status":"publish","type":"post","link":"https:\/\/www.stratospherenetworks.com\/blog\/how-to-calculate-your-risk-appetite-accepting-the-impossibility-of-flawless-it-security\/","title":{"rendered":"How to calculate your risk appetite: Accepting the impossibility of flawless IT security"},"content":{"rendered":"

\"AIn the world of cybersecurity, the pursuit of perfection is a futile endeavor. You could devote every last cent of your company\u2019s budget to fending off threats and still get hacked tomorrow, Gartner Distinguished VP Analyst Paul Proctor explained in a webinar titled \u201cTreat Cybersecurity as a Business Investment for Better Outcomes<\/a>.\u201d<\/p>\n

He went on to note that when auditors determine penalties following a breach, they\u2019re aware that \u201ceverybody gets hacked.\u201d It\u2019s impossible to avoid the relentless flood of cybercrime: The global volume of cyberattacks hit a new record high in the fourth quarter of 2022, reaching 1,168 weekly cyberattacks per organization on average, according to Check Point Research<\/a>.<\/p>\n

With everyone facing a bombardment of attacks, what matters to regulators is the CARE standard<\/a> \u2013 i.e., having security controls that are consistent, adequate, reasonable, and effective.<\/p>\n

\u201cIt\u2019s not about whether you get hacked or not,\u201d Proctor said. \u201cIt\u2019s about whether you have the right level of protection.\u201d<\/p>\n

Finding that ideal level involves calculating your organization\u2019s \u201crisk appetite.\u201d However, many businesses don\u2019t have a proper scale to measure how much IT security risk they\u2019re willing and able to stomach. If you haven\u2019t yet assessed your appetite, here\u2019s everything you need to know about defining it and why it\u2019s a crucial part of your cybersecurity strategy.<\/p>\n

What is risk appetite and why does it matter?<\/h2>\n

Risk appetite is \u201cthe amount of risk an entity (i.e., enterprise, organizations, public or private organizations) is willing to take to achieve its strategic objectives,\u201d according to the ISACA article \u201cTips for Setting or Evaluating Risk Appetite<\/a>\u201d by Lisa Young, CISA, CISM, CISSP, a senior metrics engineer at Netflix and (ISC)\u00b2 Board of Directors member.<\/p>\n

Effective enterprise risk management involves crafting a risk appetite statement at a high level for your company. You must clearly communicate this statement across the organization and serve as a framework for making decisions and policies, establishing boundaries for reasonable behavior that balances taking risks with achieving desired outcomes. It will also help your company prove to regulators that you\u2019ve taken steps to proactively manage IT security risks, according to the McKinsey & Company article \u201cCreating a technology risk and cyber risk appetite framework<\/a>.\u201d<\/p>\n

Similarly, the Factor Analysis of Information Risk (FAIR) TM \u00a0<\/sup>Institute<\/a> states that risk appetite is an acceptable \u201ctarget level of loss exposure\u201d for your organization, taking your resources and goals into account. Meanwhile, \u201crisk tolerance\u201d is the amount of variance you\u2019ll accept from your defined risk appetite. Your risk appetite is like a speed limit on the highway, whereas the risk tolerance is the amount you can drive over or under the limit (e.g., 5 miles per hour) without receiving a ticket, according to the FAIR Institute.<\/p>\n

Determining your cybersecurity risk appetite: 9 key factors to consider<\/h2>\n

When you define your company\u2019s risk appetite, you should consider the following crucial factors, according to McKinsey & Company, ISACA, and the FAIR Institute.<\/p>\n

    \n
  1. Your current cyber insurance coverage<\/li>\n
  2. The maximum amount of downtime tolerable for each business-critical system<\/li>\n
  3. The maximum number of confidential records you\u2019re willing to accept exposure of in the event of a data breach<\/li>\n
  4. The impact of previous significant security incidents affecting your organization<\/li>\n
  5. The maximum total financial loss acceptable for your business<\/li>\n
  6. Regulatory compliance requirements<\/li>\n
  7. Potential health and safety impacts of security incidents<\/li>\n
  8. High-level organizational objectives that you must balance with security<\/li>\n
  9. Overall capabilities to enforce your risk appetite and security controls<\/li>\n<\/ol>\n

    Lighten the workload with managed security services<\/h2>\n

    Effectively managing security risks can prove incredibly challenging, given how quickly the cybersecurity solution and threat landscapes change. Working with a third-party security service provider to define your risk appetite and tolerance can lessen the workload for your in-house IT and cybersecurity staff and ensure you have access to cutting-edge solutions and expertise. With our background as a former managed security service provider (MSSP)<\/a>, we can leverage our experience and extensive partner network to streamline the process of finding a partner capable of meeting your organization\u2019s unique needs. Instead of spending dozens of hours researching your options and arranging demos and meetings, let us do all the homework for you.<\/p>\n

    Take the first step toward enhanced security today by calling 877-599-3999 or emailing sales@stratospherenetworks.com<\/a> to schedule a meeting with our consultants.<\/p>\n","protected":false},"excerpt":{"rendered":"

    In the world of cybersecurity, the pursuit of perfection is a futile endeavor. You could devote every last cent of your company\u2019s budget to fending off threats and still get hacked tomorrow, Gartner Distinguished VP Analyst Paul Proctor explained in … Read more ><\/span><\/a><\/p>\n","protected":false},"author":5,"featured_media":5855,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[263],"tags":[],"class_list":["post-5854","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyber-corner"],"yoast_head":"How to assess risk appetite<\/title>\n<meta name=\"description\" content=\"Defining your risk appetite is an essential part of any IT security program. 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