Cybersecurity and Compliance Risk: A Complete Guide

Cybersecurity and compliance risk are significant concerns for organizations of all sizes as the potential impacts of a data breach or cyberattack can be severe.

Businesses as a result need robust cybersecurity measures to protect their sensitive data and systems in today’s digital age.

At the same time, organizations must also ensure they comply with relevant data privacy laws and regulations, which can vary depending on the industry and location.

Watch a new episode of Kitetoons, a cartoon by cybersecurity leader Kiteworks, on how Rick the Risky Rabbit disrupts the Cybersecurity and Compliance of his organization.

This article provides a practical guide for organizations looking to manage and mitigate cybersecurity and compliance risk effectively.

First and foremost, it is vital to comprehend the specific risks your organization faces. How? Conducting a risk assessment to identify vulnerabilities and potential threats should be considered a best practice in understanding business risks.

Your first step should be familiarizing yourself with the IRM program.

What Is an IRM Program?

An Information Risk Management (IRM) program is a structured approach to managing the risks associated with handling sensitive information. An IRM program aims to protect against data breaches, cyberattacks, and other information security incidents.

IRM Programs Typically Involve:

Identifying potential risks and vulnerabilities
Establishing policies and procedures for handling sensitive information
Providing training to employees on information security best practices
Implementing security controls such as encryption and firewalls
Regularly reviewing and testing the effectiveness of these measures

An IRM program can help organizations comply with relevant laws and regulations and protect against the potential consequences of a data breach or other cybersecurity incident, such as reputational damage and financial losses.

Some Common Types of Cybersecurity Risks Include

1. Phishing Attacks

Phishing is a type of cyberattack that involves tricking individuals into divulging sensitive information or clicking on a malicious link.

The attackers typically use email or other electronic communication to impersonate a legitimate source, such as a bank or government agency, to convince the victim to disclose sensitive information or perform an action.

For example, a phishing attack might involve an attacker sending an email that appears to be from a victim’s bank, asking the victim to log in to his account by clicking on a link.

If the victim clicks on the link and enters his login credentials, the attacker can use this information to access the victim’s account. Once the attacker has access to the victim’s account, he can transfer or withdraw the victim’s money.

Phishing attacks can be challenging to detect; attackers often use sophisticated tactics to make emails or other communication appear legitimate. It is essential therefore for individuals and organizations to be vigilant and protect themselves from this type of threat.

2. Malware

Malware is software designed to damage or disrupt computer systems, often by installing malicious code without the user’s knowledge. Malware types include viruses, worms, Trojans, and ransomware.

Malware poses a significant risk to organizations. For example, suppose a team member clicks on a link in a phishing email and downloads malware onto their computer.

The malware can spread to other devices on the organization’s network, causing widespread damage. In addition, malware can steal your sensitive data, such as login credentials or financial information, putting the organization at risk of a data breach.

Organizations looking to mitigate the risk of malware should implement appropriate cybersecurity controls, such as antivirus software and firewalls.

It is also essential to educate employees on best practices for staying safe online, including avoiding suspicious links and downloads. By taking these precautions, organizations can reduce the risk of malware attacks and protect their systems and data.

3. Ransomware

Ransomware is a type of malware that encrypts a victim’s files and demands a ransom from the victim to restore access. Ransomware can be particularly damaging for organizations as it can severely disrupt critical business operations and lead to valuable data loss.

Say for example a team member clicks on a malicious link in a phishing email and inadvertently installs the ransomware on their computer.

The ransomware can spread to other devices on the organization’s network, encrypting important files and rendering them inaccessible. The attackers can then demand an exorbitant ransom in exchange for the decryption key.

If the organization refuses to pay the ransom, the attackers can delete the encrypted files or sell the files’ content on the dark web.

Organizations that wish to mitigate the risk of ransomware attacks should implement appropriate cybersecurity controls, such as antivirus software and firewalls, just as they would with other forms of malware.

It is also essential to have robust backup and recovery systems in case of a ransomware attack or other data loss event. By taking these precautions, organizations can reduce the risk of ransomware attacks and protect their systems and data.

4. Unsecured Network

An unsecured network is a network that lacks protection against unauthorized access. It can be a significant cybersecurity risk, as unsecured networks are especially vulnerable to attacks by hackers.

Consider an organization that has a network of computers and servers connected to the internet. A hacker can gain access to the network if the organization does not have proper security measures, such as firewalls and secure passwords.

With unfettered access, the hacker can steal sensitive data, disrupt business operations, or install malware.

Organizations should implement appropriate security measures to mitigate the risk of unsecured networks, such as firewalls, secure passwords, and encryption. It is also important to regularly maintain and update these security features to ensure they are current and effective.

By taking these precautions, organizations can protect their networks and reduce the risk of cyberattacks.

Once you clearly understand your organization’s risks, you can then implement appropriate controls to mitigate those risks.

Here Are Some Critical Strategies for Improving Cybersecurity and Reducing Compliance Risk, With Examples

1. Perform a Risk assessment

As previously stated, the first, and most important step in improving cybersecurity and reducing compliance risk is clearly understanding your organization’s unique risks. A risk assessment can involve conducting tests to identify vulnerabilities and potential threats.

For example, an organization might identify a heightened risk of phishing attacks due to a lack of team member training on spotting these scams.

2. Implement Strong Password

One of the most basic but effective ways to improve cybersecurity is to use complicated passwords.

For example, an organization might implement a policy requiring employees to use passwords at least 12 characters long and include a combination of letters, numbers, and special symbols.

Requiring employees to change their passwords regularly can also help to prevent unauthorized access.

3. Provide Cybersecurity Training

Educating employees on best practices for staying safe online, including how to spot phishing attacks and handle sensitive information securely, is an extremely effective way to reduce the risk of cyberattacks.

For example, an organization might require regular training sessions on cybersecurity topics such as how to identify phishing emails and the importance of using strong passwords.

4. Use Encryption

Encrypting data makes it much harder for hackers to access sensitive information, even if they breach your defenses. For example, an organization might use encryption in transit and at rest to protect sensitive data such as customer credit card numbers or confidential business documents.

5. Conduct Regular Security Audits

Regularly reviewing and testing your organization’s cybersecurity measures can help identify and address any weaknesses. For example, an organization might conduct regular penetration testing to identify vulnerabilities in its systems and networks.

6. Stay Up to Date with Relevant Laws and Regulations

Familiarizing yourself with applicable national, regional, and/or industry compliance requirements will help reduce the risk of penalties and fines that can hurt your organization’s finances and reputation.

For example, an organization in the healthcare industry might implement appropriate safeguards for protecting patient data to help it comply with HIPAA.

Here Is a List of Some Common Cybersecurity Compliance Standards and Regulations, Along with Some Brief Explanations of Each

1. Payment Card Industry Data Security Standard (PCI DSS)

The Payment Card Industry Data Security Standard (PCI DSS) is a set of protection standards designed to require all organizations that accept, process, store, or transmit credit card data to maintain a secure environment.

The Payment Card Industry Security Standards Council (PCI SSC) developed this measure for major credit card companies, including Visa, Mastercard, American Express, and Discover.

PCI DSS is a set of requirements that apply to all organizations that handle credit card transactions, regardless of size or industry.

The standard includes the need to protect cardholder data in storage and transit and the requirements for secure networks, systems, and processes.

Some of the specific requirements of PCI DSS include:

Maintain a secure network by installing and maintaining firewalls and other security measures to protect cardholder data
Protect cardholder data by encrypting it when transmitted across open, public networks
Ensure cardholder data security by regularly testing and monitoring networks and systems
Implement strong access controls, including unique IDs and passwords, to prevent unauthorized access to cardholder data

PCI DSS is not a law but rather a set of industry standards that organizations must follow if they want to accept credit card payments. Failing to comply with PCI DSS can result in fines, reputational damage, and the loss of the ability to accept credit card payments.

2. Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that sets standards for protecting sensitive patient health information. HIPAA applies to various organizations, including healthcare providers, health plans, and clearinghouses.

HIPAA includes two main components: the Privacy Rule and the Security Rule. The Privacy Rule establishes national standards for protecting protected health information (PHI), while the Security Rule sets standards for protecting electronically protected health information (ePHI).

The Privacy Rule specifies how protected health information can be used and disclosed by covered entities, which include healthcare providers, health plans, and healthcare clearinghouses. It also gives individuals the right to access and control their personal health information.

The Security Rule sets electronic protected health information security standards, including implementing technical, physical, and administrative safeguards to protect ePHI.

Some of the specific needs of the Security Rule include the following:

Implement technical safeguards to protect against unauthorized access to ePHI, such as firewalls and access controls
Implement physical safeguards to protect against unauthorized access to ePHI, such as locked file cabinets and restricted access to data centers
Implement administrative safeguards to protect against unauthorized access to ePHI, such as policies and procedures, training programs, and risk assessments

HIPAA imposes penalties for violations of its provisions, including fines and potential criminal penalties for willful violations. Covered entities must be aware of and compliant with HIPAA requirements to protect protected health information’s privacy and security.

3. Sarbanes-Oxley Act (SOX)

The Sarbanes-Oxley Act (SOX) is a U.S. federal law enacted in 2002 in response to several corporate accounting scandals, such as Enron and WorldCom, that rocked the U.S. financial markets.

The primary purpose of SOX is to protect investors by improving the accuracy and reliability of corporate disclosures made by public companies. It does this by setting new or enhanced standards for all U.S. public company boards, management, and public accounting firms.

Here are some key provisions of SOX:

Title I establishes the Public Company Accounting Oversight Board (PCAOB), which is responsible for overseeing the activities of auditors of public companies.
Title II, also known as the Corporate Responsibility Act, requires the CEO and CFO of a public company to certify the accuracy of the company’s financial statements and establish internal controls to ensure the accuracy of those statements.
Title III, the Corporate Fraud Accountability Act, establishes new criminal penalties for fraud and other white-collar crimes.
Title IV, the Enhanced Financial Disclosures Act, requires public companies to disclose more information about their financial condition and operations, including off-balance sheet transactions and related party transactions.
Title V, the Analyst Conflict of Interest Act, requires analysts to disclose any potential conflicts of interest when making recommendations about public companies.
Title VI, known as the Commission Resource and Authority Act, gives the Securities and Exchange Commission (SEC) additional resources and authority to enforce the provisions of SOX.

Overall, SOX intends to improve public companies’ transparency and accountability and restore investor confidence in these companies and the financial markets in which they trade.

4. General Data Protection Regulation (GDPR)

The General Data Protection Regulation (GDPR) is a set of laws designed to provide data protection and privacy for all individuals within the European Union (EU) and the European Economic Area (EEA).

The GDPR aims to give control back to individuals over their data and to streamline the regulatory climate for international business by unifying the rule within the EU. It also addresses the export of personal data outside the EU and EEA.

The GDPR sets out specific requirements for how businesses and organizations must manage personal data, including:

Obtain explicit consent from individuals before collecting, using, or storing their data
Allow individuals to access their data and request that it be corrected or deleted
Notify individuals of any data breaches that could potentially compromise their data
Implement appropriate technical and organizational measures to secure personal data
Restrict the transfer of personal data to countries outside the EU unless those countries provide an adequate level of data protection

Noncompliance with the GDPR can result in fines of up to €20 million or 4% of the offending company’s annual global revenue, whichever is greater. The GDPR applies to any business or organization that processes the personal data of EU and EEA citizens.

5. ISO 27001

Is an international standard for information security management that provides a framework for organizations to follow to protect their sensitive information.

It includes requirements for establishing and maintaining a security management system, conducting risk assessments, and implementing controls to mitigate identified risks.

6. NIST Cybersecurity Framework

This framework, developed by the National Institute of Standards and Technology (NIST), is designed to help organizations manage cybersecurity risks. It includes a set of guidelines and best practices for identifying, protecting, detecting, responding to, and recovering from cybersecurity threats.

These are just a few examples of the many cybersecurity compliance standards and regulations that organizations may need to follow. Organizations must be aware of the specific requirements that apply to them to ensure they adequately protect their sensitive information.

Conclusion

Cybersecurity and compliance risks are critical concerns for organizations of all sizes. The increasing complexity of the digital landscape and the growing sophistication of cyber threats means that organizations must be proactive in managing these risks.

A practical cybersecurity, data protection, or risk management program can help organizations by providing precise and actionable guidance on identifying, assessing, and mitigating these risks.

By following best practices and staying up to date with the latest compliance standards and regulations, organizations can protect themselves and their customers from the negative impacts of cyber threats.

Ultimately, a strong focus on cybersecurity and compliance can help organizations build trust and confidence with their customers, stakeholders, and the broader community, which is essential for long-term success in today’s digital world.

Author Bio
Israt Jahan Femi is a seasoned SEO specialist with over five years of experience in digital marketing. She specializes in helping businesses improve their online presence and drive more website traffic through effective search engine optimization strategies.