Most companies don’t think they’re at risk of a cyber security attack until it happens to them. By then, it’s too late to stop the wheels already in motion. Their system is compromised, information may be stolen, and the entire organisation is vulnerable. Prevention starts with business leaders creating a risk management strategy that ensures data and IT infrastructure remain safe.
A risk management framework isn’t as complicated as it sounds. By adopting this framework, your company is better equipped to assess and mitigate financial, legal, and cyber risks. After all, cyber attacks also affect your business partners, suppliers, and customers.
Think of it as a type of insurance, providing you with control over your data and peace of mind should anything happen.
What is the NIST Risk Management Framework?
The National Institute of Standards and Technology (NIST) is an agency of the U.S. Department of Commerce. This agency is responsible for creating the NIST Risk Management Framework, a seven-step process that helps businesses manage their security and privacy. As a tool to keep hackers out and your data safe, this framework can help protect your information and minimise risks.
In 2023, many businesses experienced cyber attacks such as ransomware and phishing. MOVEit, a file transfer application, suffered not one attack but a series of breaches. LastPass, a password manager platform, saw major fallout from an August 2022 breach that continued throughout 2023. T-Mobile, one of the most popular wireless carriers, servicing more than 110 million subscribers, was hacked—twice.
No matter how big or small your company is, or how long you’ve been in business, there’s always going to be some level of risk. “At the moment, attackers benefit from organisational indecision on cyber risk—including the prevailing lack of clarity about the danger and failure to execute effective cyber controls,” write Jim Boehm and colleagues at McKinsey & Company.
Unfortunately, there’s no way to prevent breaches entirely. What you can do, however, is implement data protection precautions that make a hacker’s job much harder.
Seven steps of the NIST Risk Management Framework
The good thing about NIST’s Risk Management Framework is that it’s comprehensive and flexible for any organisation to adopt. Even if your team isn’t familiar with the process, it’s easy to pick up and understand. If your business has an established security process and best practices in place, the NIST framework can easily complement the system you already use.
It also includes guidelines that meet compliance requirements of the Federal Information Security Modernisation Act (FISMA). Take a look at the NIST Risk Management Framework steps to understand how it works.
1. Prepare
This step lays the groundwork for the rest of the strategy. It starts with business leaders and executives opening communication regarding the framework.
For your team to use the framework effectively, everyone involved needs to understand each stage of the process and leadership’s objectives. From there, preparation tasks are often split into two groups: the organisational level and the system level.
At an organisational level, tasks typically include:
- Assigning key roles for overseeing the Risk Management Framework.
- Creating the framework specific to your business.
- Conducting any kind of risk assessment or updating previous assessments.
- Identifying and documenting common controls within your system. This may include security or privacy requirements.
System-level tasks might include:
- Identifying stakeholders who may be affected by and relevant to the system.
- Determining the types of information the risk assessment will process.
- Identifying privacy and security requirements necessary for the system to operate.
2. Categorise
The next step is to categorise your organisation’s assets, data, and systems and ensure everything is accounted for. Once your team has logged your assets, you can see the bigger picture and, in turn, understand the potential worst-case scenario should any cyber security breach occur.
During this phase of the framework, companies can delegate who is responsible for the operation and management of each type of asset. Additionally, identifying each system’s intended use and how each will connect to other systems within your organisation is another part of the categorisation phase.
3. Select
Controls are essential when developing a robust and reliable risk management framework. Security controls act as safeguards to protect the integrity and confidentiality of your organisation’s system and data. Imagine a digital gate blocking out intruders. If your network becomes compromised, the countermeasures set in place can help protect your information and system. In some cases, these controls can even detect a potential breach before it happens.
In the most recent update of the NIST Special Publication 800-37, NIST specifically added and outlined privacy controls as part of its Risk Management Framework. From a legal standpoint, laws now require organisations to establish data protection and privacy on behalf of their customers.
Privacy controls are often technical, administrative, or physical safeguards that protect personally identifiable information. These controls also need to comply with privacy requirements determined by the Office of Management and Budget (OMB). A person’s information—such as their name, address, or bank details—is the target of many cyber attacks.
4. Implement
Once you establish the controls, it’s time to put them into action.
During the implementation phase, organisations should install new processes and technology to help facilitate the Risk Management Framework. Companies should also focus on testing the controls with the system’s security and privacy plans. This is where you see the framework in action. The strength of the controls is determined by how effective they are in preventing a breach of the system during this phase.
5. Assess
Next, assess the results of the implementation phase. The goal here is to determine whether the controls functioned as expected, performed effectively throughout your system, and produced the desired outcome.
Depending on the specific procedures your business has in place, assessments may be performed on an ongoing basis. This often helps support the results of the implementation phase and helps you find weak spots to strengthen.
6. Authorise
Once the assessment is complete, a member of the organisation—usually a senior management official—determines if the security and privacy controls are effective and acceptable. This step typically involves a review of the authorisation materials of the organisation’s systems.
The senior leader identifies any risks within the system, logs any failed controls, and approves authorisation for the system to operate.
7. Monitor
With the Risk Management Framework in place and the system in operation, continuous monitoring will help maintain effectiveness over time. You want to remain vigilant when it comes to the stability of your security and privacy controls. Monitoring how the framework performs allows organisations to frequently update security and privacy plans as needed.
A successful monitoring process may include:
- Creating management and monitoring processes across the organisation.
- Establishing a risk assessment for potential changes to the system.
- Determining an assessment for selected controls.
- Reporting security and privacy risks to management officials.
How to use the NIST Risk Management Framework
The NIST Risk Management Framework is easily adaptable to any existing cyber security procedure your organisation may already have in place, or it can serve as a launchpad.
NIST states, “Because the Framework is outcome-driven and does not mandate how an organisation must achieve those outcomes, it enables scalability.” Organisations can get started using the Risk Management Framework with a few simple steps, such as:
- Start with leadership. Educate leadership teams on the framework process so they can have informed conversations, train employees, and delegate responsibilities surrounding the framework procedure.
- Establish levels of risk management. Organising specific teams and management officials to oversee the implementation of the framework allows for more efficiency and effectiveness.
- Create profiles. By using profiles—essentially roadmaps—teams can easily identify problem areas and quickly troubleshoot them to improve the system.
- Prioritise and budget for cyber security. To set your company up for continued success, cyber security needs to remain a priority. This means setting aside the necessary budget for tools, technology, and third-party resources when needed.
As far as financial limitations go, because the framework is scalable, small businesses with limited budgets can utilise it just as well as larger organisations with bigger budgets. That’s the beauty of the entire process. The structure of the Risk Management Framework supports your company at any level.
As part of a larger cyber security strategy, risk management provides an organised and systematic approach to identifying and managing risks. It helps break down tasks and responsibilities and supports a company-wide understanding of cyber security.
Protect your business with risk management procedures
Cyber security is a necessity for any business, no matter how big or small your organisation is.
With so much information stored electronically, there is always a chance that data can and will be compromised. By implementing risk management frameworks at every level of your company, you can safeguard your data if your system is exposed.
Download CloudFirst’s eBook, The Business Leader’s Guide to Cyber Security and Data Protection Strategies, to learn more about how you can protect your data, assets, and financial information.