Why cyber risk scores should be a common practice as credit scores

The business world is moving to the digital age. Companies in every industry share their clients’ private information with a third party. Every time they share this information the companies risk damaging their reputations through data breaches. So, businesses should be able to weigh the risks associated with their cybersecurity. 

What exactly is a cyber risk score?

A cyber risk score is an assessment of the strengths of your cybersecurity. Cyber risk scores determine the security risk your company has and how to reduce those risks. Cybersecurity ensures that your company is the most secure it can be and has a framework that includes cyber risk scores. Safe cyber practices are important and a data breach can cost you valuable clients and private data. 

Who should care about a cybersecurity score?

Most times we are quick to classify businesses and put them into categories depending on their size, type of business but whilst this is correct, as regards the importance of cybersecurity, it cannot be overstated that cybersecurity is critical for all businesses – large and small. 

In a ‘Cyber Security Breaches Survey 2018 that was carried out, it was revealed that 43% –  over four in ten businesses and 19% – two in ten charities in the UK suffered a cyberattack with the average cost of data breaches totaling $3.92 million in 2019. 

Clearly, in a technologically driven and fast-changing world, everyone needs to stand up, take notice and put mechanisms in place to ensure the cybersecurity of which calculating cyber risk scores is pertinent. 

Some businesses though have to take a more proactive and major stance especially when their cyber risk scores can be classified as critical. Companies who constantly put their data online or in the public domain such as IT companies, insurance, and financial services, online retail businesses, banks, etc. must be prepared to invest huge financial outlays in their cybersecurity. 

How to calculate the cyber risk score

The cyber risk score calculations cover a wide range of factors including: 

Likelihood: This is the calculation of how probable it is that your asset is breached. It is a measure of how vulnerable your asset is (which in this case, your asset is your data). ‘Likelihood’ measures the exposure your data has due to usage, the level of threat facing your asset, and what solutions are available to negate these threats. 

Business Criticality: This is the measure of damage that your company is facing should your cybersecurity become breached. The calculation is as follows: the probability (likelihood) multiplied by the size of the loss that would result from such an event. In other words, if your company has a cybersecurity threat, it is then multiplied by the effect the data breach would have on your company. 

To calculate a company’s cyber risk score, there are important criteria to be taken into consideration; 

The impact of cyber risk scores on companies

Cyber-attacks cause reputational damage and a breach of trust between you and your clients. Your clients trust you with their personal and private data, and in doing so your customers trust that you have measures in place to ensure that their data is being protected. Cyber risk scores secure your system by identifying possible problems and solutions. Cyber risk scores ensure that the relationship between you and your client is not damaged by a possible data breach. 

You should do a cyber risk score calculation on average every two years. Extra risk reviews are recommended and you should calculate them annually. To avoid becoming a part of data breach statistics ensure your cybersecurity is of a good standard. 

Cyber risk types and how to avoid them

Cyber risks include ransomware, insider threat, data breaches, using an unsecured network, phishing, hacking, and in 2020 alone, there were over 2.2 million cases of cyber fraud. Cyber-risks can derail an industry and can be expensive to deal with but it is better to avoid these risks, increase your cybersecurity and ensure that it is running in the best condition possible.  

• Ransomware which is currently the most feared form of malware is a program designed to encrypt a victim’s file with a ransom demanding the decryption key to be given and can only be avoided by employing a proactive approach by installing up-to-date anti-malware programs. It is also necessary to have an unencrypted data backup.
• Insider threat on the other hand is human-related and represents a very serious risk because when data gets leaked, the ripple effort in the hands of cybercriminals can be far more damaging than envisaged. To avoid this specific type of risk, it is important to have every staff educated on the risks involved while also placing control on access to data and usage of portable storage devices.
• Data breaches are very prevalent now thanks to the upsurge in technological trends and upgrades making it challenging for companies to keep up with security firewalls set up to prevent breaches in the system. Prevention of this cyber risk requires constant setting up of data access security, user awareness, and setting up procedures for changing access.
• Phishing is an older form of cyber risk with cybercriminals masquerading as a trustworthy business entity or person to steal financial or personal information through fraudulent messages and emails.

The easiest way to avoid this form of cyber risk is to apply “common-sense”. Keep in mind security tips which include non-disclosure of sensitive information, keeping spam filters, and being alert to suspicious emails. 

Conclusion

Your business and your clients rely on you to work smarter, not harder. Recent data breach statistics show that the FTC had to pay out $232 million to consumers in 2019. Your data is important, protect it with quality cybersecurity and good cyber risk scores.