A Primer on Cyber Risk Acceptance and What it Means to Your Business

At its core, cybersecurity is the practice of protecting computer systems, networks, and data from theft, damage, or unauthorized access. And where there is a need for protection, there is a need for risk management.

In IT security, risk refers to the potential for loss or harm related to technical infrastructure or the use of technology by your organization. This risk encompasses both the likelihood of a cyber threat materializing and its potential impact.

A fundamental idea to understand about risk is that it is inevitable. However, mitigating every single risk is both prohibitively expensive and resource intensive.

This article provides a guide to cyber risk acceptance and outlines the valuable role of continuous penetration testing in making informed risk acceptance decisions.

Defining Risk Acceptance in a Cybersecurity Context

Risk acceptance is a strategy in which an organization decides which risks they can accept based on the potential impact. CISOs, in collaboration with the other executive decision-makers, are best positioned to identify which risks pose the biggest threats to the organization, and what risks to avoid, transfer, mitigate or accept.

There are in fact different levels of risk acceptance worth defining:

Accept the risk forever

This refers to when you make a conscious decision to acknowledge a known vulnerability or threat, but not remediate it. Accepting a risk forever doesn’t mean you’re ignoring it. Instead, this level of acceptance signifies that after careful evaluation, your company deems the risk as tolerable within its current operational context.

For example, you might accept a minor software vulnerability that affects a non-critical system, has a very low chance of exploitation, and requires a disproportionately high cost to fix.

Accept temporarily

This level of risk acceptance involves taking a decision to eventually implement controls, policies, or procedures to reduce the impact or likelihood of a risk materializing.

Here, you are temporarily accepting the risk but following up on it after a set number of days to implement mitigation, whether that’s a software update or blocking a system from the Internet.

Transfer the risk

Risk transfer entails shifting the responsibility or burden of a risk to a third-party. Commonly, this occurs by buying a cyber insurance policy. Another method of risk transfer is outsourcing certain IT functions or using third-party cloud providers.

The risk hasn’t disappeared here; instead, another business takes on the task of mitigating the risk.

Eliminate now

This scenario applies when eliminating the risk as soon as possible is important to preserve operational functionality or protect data and systems from imminent threats. Critical software vulnerabilities often fall into this bucket of risk.

Here, there is no risk acceptance at all because you refuse to accept the potential consequences of a given risk.

The various types of risk acceptance exemplify the nuanced nature of cybersecurity, where not every threat warrants immediate action, and not every vulnerability needs an instant fix.

Best Practices for Cyber Risk Acceptance

• Before accepting any risk, properly assess it in terms of its potential impact and likelihood of occurrence. Use established frameworks such as NIST’s Cybersecurity Framework or ISO/IEC 27005 for guidance.
• Involve stakeholders from different departments like IT, operations, legal, and the specific business units affected by the risk. Consult with senior decision-makers in these areas because they are the stakeholders best placed to inform these strategic security decisions.
• Keep a detailed log of every accepted risk, including the reasons for acceptance, the expected impact, the stakeholders involved in the decision, and the date of acceptance.
• Implement a standardized risk scoring or rating system to consistently evaluate the severity of risks and ensure uniformity in decision-making across your IT risk environment. Doing so fosters trust and ensures everyone is informed about potential vulnerabilities.
• Schedule periodic reviews to ensure that previously accepted risks remain tolerable. As your organization evolves, alters its IT environment, or the threat landscape changes, some risks might need reconsideration. Regularly update your threat intelligence to understand the evolving nature of threats. A risk that’s acceptable today may not be in a changing threat environment.
• As systems and technologies change, your organization’s risk profile is subject to change as well. To address this, make sure to integrate risk acceptance practices with change management processes to ensure risks are re-evaluated when significant changes occur.
• Regulatory requirements, customer expectations, and industry standards can all influence which risks are acceptable, so always consider the broader context.
• External audits, penetration tests, and consultations can provide a fresh perspective on risk acceptance decisions. These external validations can uncover blind spots and validate internal evaluations.

Revisiting Risk Acceptance Decisions

As the digital landscape constantly evolves, so should your stance on previously accepted risks. The dynamic nature of threat landscapes calls for regularly revisiting risk acceptance decisions to maximize cyber resilience in the face of change.

There will be cases where the need to re-evaluate a risk acceptance decision becomes immediate.

These triggering events include experiencing a data breach, a pen test that reveals a previously accepted risk is a more serious vulnerability than thought, or introducing a new system, software, or hardware to your environment.

Aside from these triggered reviews, it’s also prudent to revisit risk acceptance decisions periodically on a scheduled basis.

The Role of Continuous Monitoring in Risk Acceptance

A decision to accept a risk today does not bind you to that stance. Given the flux of the cyber landscape, implementing continuous pen testing serves as a compass for navigating risk acceptance decisions.

Unlike traditional, point-in-time assessments, ongoing monitoring provides real-time understanding of your organization’s vulnerabilities and their potential consequences.

Outpost24’s Penetration Testing as a Service (PTaaS) is a comprehensive PTaaS solution to secure your web applications at scale.

With context aware risk-scoring, Outpost24’s PTaaS solution ensures a state of continuous monitoring. Outpost24 combines the depth and precision of manual penetration testing with vulnerability scanning to secure web applications at scale.

All findings are peer reviewed, with direct access to security experts for validation and remediation guidance. This plays a crucial role in helping your organization make informed decisions and prioritize remediation efforts based on the highest risks posed to your business. 

Agility in cyber risk assessment is paramount. New vulnerabilities are discovered daily, and threat actors consistently refine their tactics to exploit weaknesses in different ways.

Being nimble in your approach means being open to reassessing decisions, adapting to new information, and being proactive in staying ahead of potential threats.

Learn more about PTaaS here.

Sponsored and written by Outpost24

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