What is Data Risk Management?

With more data being stored digitally than ever before, businesses must begin to recognize the importance of mitigating risk when it comes to their data and establish a strong data risk management plan that keeps them secure, compliant, and operating smoothly.

*A data risk management strategy minimizes the risk of data being exposed to bad actors and helps make it easier for those within an organization to access that information. Businesses with strong data risk management protocols are more organized, more secure, and more productive, using data more effectively to make decisions and keeping it out of harm’s way.

Why is Data Risk Management Important?

Ensuring the safety and accessibility of company data is a crucial for cybersecurity, collaboration, business productivity, and more.

Here are some of the main reasons why focusing on data risk management is so important for businesses today:

Businesses Have More Digital Information Than Ever

Modern businesses are storing more data than ever before in the cloud, which calls for improved cybersecurity and data risk management measures to assure that data is protected from breaches, backed up in case of corruption, and yet still easily accessible to the people who need it.

94% of enterprises use cloud storage for their data and by 2025 there will be over 1 billion terabytes of data stored in the cloud by businesses.

Cyberthreats are More Complex and More Frequent

Part of data risk management is security and preventing sensitive company data from being exposed, stolen, or corrupted.

It’s important to stay on top of this because cyberattacks are becoming more frequent and more complex every year—those that are not managing their risk effectively are more likely than not to run into trouble sooner or later.

79% of companies that have been the victim of an attack say attacks are becoming more sophisticated.

Recovering from a cyberattack without proper preparation in the form of a data risk management strategy can be costly not only financially—costing an average of $170,000 to resolve a breach—but excessive downtime from a breach, and potential data loss, can substantially harm a business' reputation and productivity.

Common Data Risk for Businesses

The main aspect of data risk management is mitigating the risks of using data in various ways, here are a few of the most common data risks that businesses run into and can avoid with proper data risk management.

1. Human Error and Lack of Employee Training

Phishing and other cyberthreats that stem from human error are the most common forms of cybercrime, especially against businesses.

The strongest defense against this is a well-educated workforce who is aware of what to look for to avoid falling for scams and exposing personal or company information.

Human error is the biggest reason for insider data breaches, with 84% of companies being a victim of a data security incident caused by a mistake.

2. Lack of Device Protection

Mobile devices are pervasive in modern business environments, but so unfortunately is the lack of protections afforded to them.

Endpoints such as phones, laptops, printers, IoT devices, and even fridges can be connected to a network, and every device on the network must be provisioned and secured properly.

Devices that remain unsecured pose a threat to the network, as they expand the attack surface of the organization and act as a potential entry point for bad actors to enter the network and exploit its vulnerabilities.

3. Lack of Policies and Standards

The majority of companies today have to abide by one compliance regulation or another, which typically call for the implementation of security standards and protocols that ensure that risk management is adopted, and data is protected.

When businesses are not in compliance with the pertinent regulations, they will lack the standards necessary for data security and be at a far greater risk of being breached by cyberattackers.

79% of employees engage in risky data management behaviors.

Key data risks like these three listed pose significant threats to organizations all over the United States, and should be mitigated as a matter of urgency.

Data Risk Management Best Practices

1. Educate Workforce

Easy and secure data access is important for business growth as it allows an entire company to have the ability to utilize data when they need it.

Part of this is making sure that everyone in the company knows how to securely access, handle, and share that data without putting it at risk or leaving it exposed by educating them on:

• Creating and frequently changing their passwords or passphrases
• What to watch for in scams like phishing and other social engineering tactics
• Steps to safely use unsecured networks if necessary—particularly if employees are operating outside typical working environments
• Using multi-factor authentication

This is especially important for businesses who have a fully or partly remote team where workers could be accessing data from anywhere, including unsecured networks like home Wi-FI setups and networks based in public places.

2. Invest in Cybersecurity

Data security is a large part of data risk management because of the importance of preventing breaches and protecting the network from bad actors, malware, spam, phishing attacks, and more.

The simple fact of modern cybersecurity is that it is a far more complex field today than in previous years and it effects more organizations, too.

In short, cybercriminals are targeting SMBs with more frequency because the volumes of data even the smallest companies use today make them viable targets for them to pursue.

SMBs are often the most vulnerable, often lacking any substantial protocols or solutions, which makes them susceptible to attack.

In-house cybersecurity can be prohibitively expensive, so investing in a cybersecurity team or partner can pay off greatly by helping businesses stay compliant with regulations, prevent attacks, and aid in recovery if an attack occurs.

3. Utilize the Cloud for Storage and Backups

Preparation is key when it comes to data and using the cloud to store company data is secure, accessible, and helps businesses prepare for breaches or unexpected outages by having data backups in place so that work can quickly continue without extended downtime.

Modern cloud storage solutions—usually hosted in Tier III and IV data centers—provide secure and scalable options for organizations, and their improvement over the last five years have made the cloud a far more enticing choice for businesses today.

4. Ensure Compliance with Current Regulations

Staying compliant with the most up-to-date regulations can feel like a constantly moving target as regulations change, more standards are created, and more laws are established every year.

This can change based on a company’s location, its customers’ location, industry, and products.

Not being compliant with the appropriate regulations can result in large fines, loss of business, data loss, and more.

It’s recommended that consistent audits (often yearly of twice-yearly) are conducted to ensure that the current setup is appropriate when taking into account any IT infrastructure or data changes that may have changed in the interim.

An estimated 61% of organizations have experienced a compliance-related violation like the stealing of sensitive data in contravention of privacy laws.

5. Implement Access Controls

Managing data means managing who can access that data.

Businesses can control the who, when, and how of data access by implementing controls and identity management protocols that monitors who is using data, the devices that access a network, and limiting access to only those users who need it to do their jobs.

Data security, and thus risk management in part, operates under the principle that access should only be available to those who absolutely need it.

This prevents a common issue with organizations that do not implement controls (for example, if access controls are set to default) where a wide range of employees have access to shared folders, data, and information.

As a result, the attack surface of the company’s security posture is increased dramatically, which is why access controls are so important.

Insider data breaches are predicted to account for one-third of all cybersecurity incidents, with many SMBs having weak access controls and authentication protocols.

How Can Businesses Build a Data Risk Management Plan?

A holistic data risk management strategy is full of many moving parts, complicated processes, and lots of room for human error.

Businesses can build their own data risk management plan by following best practices related to established protocols (like the NIST framework) and establishing strong procedures for data management, but that can involve a lot of time and money.

Oftentimes, finding a partner to manage it is the best option to get access to a large team of experts with of real-world experience and knowledge of the latest technologies that drive the data management world.

Partnering with a managed service provider for your data management means always having experts on hand, effective and adaptable strategies, and the technology you need on your side.

Bottom Line

Having a strong data risk management plan means a company is doing everything it can to protect its most valuable data during all phases of its life from collection to storage to day-to-day use. Businesses with these plans are prepared for anything and are ready with recovery protocols to minimize downtime and the costs associated with data breaches.

Ready to learn more about how you can implement a data risk management plan in your business? Contact DOT Security today to speak with an expert who can walk you through our process and show you how to get started.