What is Digital Risk Management?
Digital risk management is the process of understanding and mitigating risks that emerge from digital transformation, the adoption of new technologies, and the proliferation of business activities across digital and social channels.
As part of the digital transformation process, organizations are transitioning their IT operations into the cloud, increasing their reliance on software applications for daily business processes, and expanding their digital footprints on both social media and web-based platforms. As a result of these changes, organizations are more vulnerable than ever to digital risks that range from technological failures to cyberattacks and data breaches.
Digital risk management enables organizations to better understand the risks they face and to effectively prioritize their efforts to mitigate risk.
9 Types of Digital Risk You Need to Manage
A digital risk management strategy should define, quantify, and address the greatest digital risks faced by your organization. These can include:
Strategic risks are those that impact the organization’s ability to achieve its strategic objectives, including things like growing revenue, capturing a greater share of the market, or winning an important account.
The potential for revenue loss due to a technological failure. This includes failures that arise from incompatible technologies, technologies that don’t scale effectively, or technologies that fail to satisfy their intended use case.
The potential for revenue loss due to an internal or external event that interrupts the organization’s ability to execute its daily operations.
Third-party risks are those that originate from the organization’s relationships with vendors, suppliers, and other external partners. These risks can arise from operations dependency, poor vendor resiliency, unregulated data sharing, and tech integration challenges.
Regulatory and Compliance Risks
Organizations in sectors like healthcare, banking, and insurance must follow industry-specific regulatory requirements when it comes to managing data security and privacy in digital systems. These include things like implementing data access controls, effectively securing personally identifying information, and data retention requirements. Regulatory and compliance risks are those that impact an organization’s ability to comply with the law.
The potential for digital threat actors to gain access to secured IT systems and either commit fraud or exfiltrate data assets. Cybersecurity risks include both technical exploits and social engineering attacks that incorporate phishing, domain spoofing, impersonation, and other deceptive techniques.
Business Resilience Risks
Business resilience risks are those that would harm an organization’s ability to restore IT operations after an unplanned service outage, including a cyberattack or a data breach.
Data Leakage Risks
Data leakage risks are those associated with the unauthorized exfiltration of data from within an organization to an external recipient. The recipient could be a digital threat actor who steals the data in a cyberattack, or it could be a vendor, customer, or contractor who receives the data by mistake. In addition to personally identifying employee and customer data, data leakage can result in the loss of trade secrets, proprietary knowledge, application source code, inventory information, and research data.
Privacy risks arise from the improper handling of personally identifying employee and customer data. Personal data may be stolen in a cyberattack or data breach and used to commit identity theft or fraudulently obtain credit.
The risk that a cyberattack or data breach could harm the organization’s reputation in the marketplace and negatively impact the value of its brand.
How Does Digital Risk Management Work?
Auditing Your Digital Footprint
The first step to successful digital risk management is to take an inventory of your organization’s digital assets, including domains and websites, brand assets, and owned social media profiles.
Threat Intelligence and Awareness
Having identified the extent of your organization’s digital footprint, the next step is to understand the potential threats to those assets. IT SecOps teams can use tools like the MITRE ATT&CK framework to learn about the techniques that cyberattacks use to target digital infrastructure.
Monitoring the Public Attack Surface
Managing digital risk means effectively monitoring the public attack surface for potential threats. Today’s leading digital risk protection solutions use artificial intelligence to efficiently monitor digital channels for threats to organizations, brand assets, products, employees, and customers.
Takedowns and Remediation
A comprehensive approach to digital risk management includes protocols for remediating digital threats, including the ability to initiate takedowns of fraudulent digital infrastructure.
Support Your Digital Risk Management Strategy with ZeroFOX
ZeroFOX provides enterprises protection, intelligence, and disruption to dismantle external threats to brands, people, assets, and data across the public attack surface in one comprehensive platform. ZeroFOX helps you protect against digital risks that originate from phishing, malware, business email compromise, and other kinds of cyberattacks.
Check out our free white paper A Taxonomy of Digital Threats to learn more about the four categories of digital threats, how they impact your organization, and how you can reduce digital risk by detecting and remediating threats with ZeroFOX.