Why do we need to talk about an Integrated Risk Management now? When the options for digital solutions were relatively limited and technological advancement moved at a slower pace, risk management was largely determined by compliance. Additionally, as each team or department within an organisation was the best authority on how to achieve regularity compliance, they could be left to deal with their own risk management concerns.
Today, however, with a large selection of software at their disposal and an increasingly tech-literate workforce becoming more tech-literate, an organisation’s various business units can choose digital solutions that best suit their function and purpose. Consequently, security and risk teams now face a unique and ever-changing set of risks, so a compliance-led approach to risk management is no longer sufficient.
Now, in the face of a dynamic risk profile and attack surface, organisations need to make the shift from a modular approach to risk management to integrated risk management (IRM) strategy. Let’s take a look at how your organisation can make this transition.
What is Integrated Risk Management?
Integrated risk management is an approach that combines cybersecurity and all other risk management in an organisation. It encompasses a set of frameworks, tools, policies, and processes that enhances visibility across an organisation’s entire risk and se curity posture. By combining its different risk management functions into an IRM framework, your organisation can shift its focus from assessing each risk in isolation to considering its collective exposure to risks.
The traditional approach to risk management saw separate business units within an organisation identifying and mitigating their own collection of risks to achieve regulatory compliance. However, this resulted in an organisation’s various teams and departments operating in silos and a limited, narrow view of risk mitigation and remediation.
An IRM strategy accounts for your organisation’s distinct combination of risks and emphasises a risk-centric, rather than compliance-centric, approach to information security.
How to implement an integrated risk management strategy
Here are the steps involved in successfully implementing an IRM strategy.
Establish Risk Ownership
The first step requires determining the roles and responsibilities of those involved in mitigating risks within your organisation. In many cases, the personnel responsible for handling risk in their department or team will be clear, as they will already be handling it under the conventional, modular approach to risk management. In other cases, a business unit will need to appoint a risk officer to represent them.
Implement a Risk Assessment
To integrate its risk management policies and controls, your organisation needs to evaluate their current risk profile and security posture. In other words, assess their collective pain points and vulnerabilities as an organisation instead of siloed business units. To achieve this, the appointed risk and security teams required complete visibility across all teams, departments, partners, and third and fourth-party suppliers.
This risk assessment should involve the following:
- Identifying the relationships between business processes
- Determining the risks associated with each process
- Evaluating and prioritising risks
- Identifying the controls currently in place for mitigating risk
- Validating the efficacy of those controls
- Determining the regulations to which each control applies
Implement Controls to Mitigate Risks
Having gained complete visibility of its risk profile, your organisation can implement the mechanisms required for your integrated risk management framework. This requires you to map their processes to risk-mitigating controls and compliance audit regulations.
Upon doing so, you’ll now be able to deploy standardised controls and tests for multiple regulations, consolidate redundant risk data, and reduce related compliance costs. Standardised controls also allow for greater automation which further allows your organisation to save time, lower costs, and better mitigate risks.
This involves continuously monitoring your IRM framework to assess the effectiveness of its risk mitigation controls, identify areas for improvement, and, ultimately, determine if the desired objectives are being met.
Communication and Reporting
Establishing the best means of keeping all stakeholders informed of the effectiveness of the integrated risk response.
What Are The Benefits Of An Integrated Risk Management Approach?
Although it takes time, effort, and cooperation between different business units to implement an IRM framework, the benefits are significant. This includes:
A More Risk-aware Organisation: The shift to an integrated risk management approach helps the different business units within your organisation to become more aware of the risks associated with each digital solution they adopt and implement. Consequently, employees will take greater accountability for risk mitigation instead of viewing it as the sole responsibility of your cybersecurity teams – or IT department. Over time, this will help your organisational culture evolve into one that supports security best practices and collectively assists in mitigating risk.
Enhanced Cross-functional visibility and functionality across your organisation: Because an IRM approach requires your risk management teams to determine the relationship between different business processes, you’ll also better understand how information flows through your organisation. As well as allowing you to implement standardised, risk-mitigating controls, this can help improve collaboration and business continuity between different teams and departments, boosting your organisation’s efficiency and, in turn, productivity.
To learn more about how your organisation can make the shift to an integrated risk management approach, please get in touch with RiskXchange.