Risk management is critical for protecting your business from legal, financial, and data security risks. A risk management strategy is your organization’s approach to identifying, monitoring, and mitigating those risks and involves strategic consideration for items like policies, risk tolerance, processes and practices, and roles and responsibilities.
Why you should have a risk management strategy
A risk management strategy is an essential aspect of keeping your business secure. Here are a few ways your organization benefits from having a risk management strategy:
- Proactive prevention: A risk management strategy establishes processes that prepare your organization if it faces a serious threat. Rather than waiting for these threats to come up and determining how to respond, your organization is proactive about how it manages these threats.
- Less risk gaps: Your organization is more likely to have gaps if you’re taking an ad-hoc approach to risk management. A strategic approach empowers your organization to employ a more accurate, thorough, and effective risk management program to reduce potential gaps.
- Better alignment: Preventing and mitigating issues can help the organization maintain operations and work towards its goals. A strong risk management strategy integrates and aligns the organization’s risk goal and its business objectives.
- Enhanced trust: A risk management strategy helps you earn customer trust by demonstrating that you’re taking a proactive approach to managing your risks that could impact your customer’s data and their access to your product.
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What should your risk management strategy include?
Here are a few elements your risk management strategy should include:
- Your organization’s approach to risk management — including your risk tolerance level and risk priorities.
- Roles and responsibilities for the different aspects of your risk management program.
- Your risk management process that will typically follow this model:
- Identify potential risks that could affect the business.
- Analyze those risks, determining root cause, the likelihood of the risk occurring, the impact it would have, and which risks are the highest priority.
- Risk treatment or the steps you’ll take to mitigate this risk.
- Continuous monitoring to identify new risks or changes to existing risks that need to be addressed.
- Visibility into risk strategies to ensure that all stakeholders understand your risk standing.
- Tools you’ll use to manage your risks and mitigation tasks.
Common risk responses
Once you’ve identified your risks, it’s important to figure out how to respond to them, which is called risk treatment or risk handling strategies. You can respond to a risk in one of four ways: acceptance, transference, avoidance, or mitigation.
- Acceptance: When you accept a risk, you’re choosing not to take action on the identified risk. This response is typically for risks that are unlikely and would have low impact if they did occur.
- Transference: This is when you use a third-party to take on the risk and the liability on your behalf. This is used if your organization doesn’t have the expertise or resources to manage the risk yourself or if it’s easier and more cost-effective to transfer the risk to an external party.
- Avoidance: This is avoiding the risk entirely by ending the practice that makes the risk possible. This is implemented when a risk has a high probability and high impact and when it's more cost-effective to avoid the risk than to mitigate it.
- Mitigation: This is when your organization decides to take steps to reduce the probability and impact of a risk. This response is taken when it is determined that there is a cost-effective way to reduce the risk to an acceptable level or when risk avoidance isn’t possible.
Automate your risk management
Thorough risk management doesn’t require extensive work. Use Vanta’s Risk Management solution to optimize your existing workflows to pass audits, gain attestations faster, reduce costs, and accelerate your revenue. The Vanta platform simplifies and automates SaaS-based risk assessments, eliminating the need for countless spreadsheets and endless email threads with internal teams and auditors.
To learn more about Vanta’s Risk Management solution, take a tour or request a demo.
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Risk
What is a risk management strategy?
Risk
Risk management is critical for protecting your business from legal, financial, and data security risks. A risk management strategy is your organization’s approach to identifying, monitoring, and mitigating those risks and involves strategic consideration for items like policies, risk tolerance, processes and practices, and roles and responsibilities.
Why you should have a risk management strategy
A risk management strategy is an essential aspect of keeping your business secure. Here are a few ways your organization benefits from having a risk management strategy:
- Proactive prevention: A risk management strategy establishes processes that prepare your organization if it faces a serious threat. Rather than waiting for these threats to come up and determining how to respond, your organization is proactive about how it manages these threats.
- Less risk gaps: Your organization is more likely to have gaps if you’re taking an ad-hoc approach to risk management. A strategic approach empowers your organization to employ a more accurate, thorough, and effective risk management program to reduce potential gaps.
- Better alignment: Preventing and mitigating issues can help the organization maintain operations and work towards its goals. A strong risk management strategy integrates and aligns the organization’s risk goal and its business objectives.
- Enhanced trust: A risk management strategy helps you earn customer trust by demonstrating that you’re taking a proactive approach to managing your risks that could impact your customer’s data and their access to your product.
{{cta_withimage4="/cta-modules"}}
What should your risk management strategy include?
Here are a few elements your risk management strategy should include:
- Your organization’s approach to risk management — including your risk tolerance level and risk priorities.
- Roles and responsibilities for the different aspects of your risk management program.
- Your risk management process that will typically follow this model:
- Identify potential risks that could affect the business.
- Analyze those risks, determining root cause, the likelihood of the risk occurring, the impact it would have, and which risks are the highest priority.
- Risk treatment or the steps you’ll take to mitigate this risk.
- Continuous monitoring to identify new risks or changes to existing risks that need to be addressed.
- Visibility into risk strategies to ensure that all stakeholders understand your risk standing.
- Tools you’ll use to manage your risks and mitigation tasks.
Common risk responses
Once you’ve identified your risks, it’s important to figure out how to respond to them, which is called risk treatment or risk handling strategies. You can respond to a risk in one of four ways: acceptance, transference, avoidance, or mitigation.
- Acceptance: When you accept a risk, you’re choosing not to take action on the identified risk. This response is typically for risks that are unlikely and would have low impact if they did occur.
- Transference: This is when you use a third-party to take on the risk and the liability on your behalf. This is used if your organization doesn’t have the expertise or resources to manage the risk yourself or if it’s easier and more cost-effective to transfer the risk to an external party.
- Avoidance: This is avoiding the risk entirely by ending the practice that makes the risk possible. This is implemented when a risk has a high probability and high impact and when it's more cost-effective to avoid the risk than to mitigate it.
- Mitigation: This is when your organization decides to take steps to reduce the probability and impact of a risk. This response is taken when it is determined that there is a cost-effective way to reduce the risk to an acceptable level or when risk avoidance isn’t possible.
Automate your risk management
Thorough risk management doesn’t require extensive work. Use Vanta’s Risk Management solution to optimize your existing workflows to pass audits, gain attestations faster, reduce costs, and accelerate your revenue. The Vanta platform simplifies and automates SaaS-based risk assessments, eliminating the need for countless spreadsheets and endless email threads with internal teams and auditors.
To learn more about Vanta’s Risk Management solution, take a tour or request a demo.
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How to manage risk with Vanta
Learn how to get thorough risk assessments while also making the process easier to manage.
How to manage risk with Vanta
Learn how to get thorough risk assessments while also making the process easier to manage.
How to manage risk with Vanta
Learn how to get thorough risk assessments while also making the process easier to manage.
Vanta’s VRM has slashed the time I spend on vendor security assessments from one full day to only one hour each week."
Cameron Perry Staff Site Reliability Engineer | Kapiche
| Role: | GRC responsibilities: |
|---|---|
| Board of directors | Central to the overarching GRC strategy, this group sets the direction for the compliance strategy. They determine which standards and regulations are necessary for compliance and align the GRC strategy with business objectives. |
| Chief financial officer | Primary responsibility for the success of the GRC program and for reporting results to the board. |
| Operations managers from relevant departments | This group owns processes. They are responsible for the success and direction of risk management and compliance within their departments. |
| Representatives from relevant departments | These are the activity owners. These team members are responsible for carrying out specific compliance and risk management tasks within their departments and for integrating these tasks into their workflows. |
| Contract managers from relevant department | These team members are responsible for managing interactions with vendors and other third parties in their department to ensure all risk management and compliance measures are being taken. |
| Chief information security officer (CISO) | Defines the organization’s information security policy, designs risk and vulnerability assessments, and develops information security policies. |
| Data protection officer (DPO) or legal counsel | Develops goals for data privacy based on legal regulations and other compliance needs, designs and implements privacy policies and practices, and assesses these practices for effectiveness. |
| GRC lead | Responsible for overseeing the execution of the GRC program in collaboration with the executive team as well as maintaining the organization’s library of security controls. |
| Cybersecurity analyst(s) | Implements and monitors cybersecurity measures that are in line with the GRC program and business objectives. |
| Compliance analyst(s) | Monitors the organization’s compliance with all regulations and standards necessary, identifies any compliance gaps, and works to mitigate them. |
| Risk analyst(s) | Carries out the risk management program for the organization and serves as a resource for risk management across various departments, including identifying, mitigating, and monitoring risks. |
| IT security specialist(s) | Implements security controls within the IT system in coordination with the cybersecurity analyst(s). |
Explore more GRC articles
Introduction to GRC
Implementing a GRC program
Optimizing a GRC program
Governance
Risk
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