How to Perform a Network Security Risk Assessment in 6 Steps

For your organization to implement robust security policies, it must have clear information on the security risks it is exposed to. An effective IT security plan must take the organization’s unique set of systems and technologies into account. This helps security professionals decide where to deploy limited resources for improving security processes.

Cybersecurity risk assessments provide clear, actionable data about the quality and success of the organization’s current security measures. They offer insight into the potential impact of security threats across the entire organization, giving security leaders the information they need to manage risk more effectively.

Conducting a comprehensive cyber risk assessment can help you improve your organization’s security posture, address security-related production bottlenecks in business operations, and make sure security team budgets are wisely spent.

This kind of assessment is also a vital step in the compliance process. Organizations must undergo information security risk assessments in order to meet regulatory requirements set by different authorities and frameworks, including:

• The Health Insurance Portability and Accountability Act (HIPAA),

• The International Organization for Standardization (ISO)

• The National Institute of Standards and Technology (NIST) Cybersecurity Framework

• The Payment Card Industry Data Security Standard (PCI DSS)

• General Data Protection Regulation (GDPR)

What is a Security Risk Assessment?

Your organization’s security risk assessment is a formal document that identifies, evaluates, and prioritizes cyber threats according to their potential impact on business operations. 

Categorizing threats this way allows cybersecurity leaders to manage the risk level associated with them in a proactive, strategic way.

The assessment provides valuable data about vulnerabilities in business systems and the likelihood of cyber attacks against those systems. It also provides context into mitigation strategies for identified risks, which helps security leaders make informed decisions during the risk management process.

For example, a security risk assessment may find that the organization needs to be more reliant on its firewalls and access control solutions. If a threat actor uses phishing or social engineering to bypass these defenses (or take control of them entirely), the entire organization could suffer a catastrophic data breach. In this case, the assessment may recommend investing in penetration testing and advanced incident response capabilities.

Organizations that neglect to invest in network security risk assessments won’t know their weaknesses until after they are actively exploited. By the time hackers launch a ransomware attack, it’s too late to consider whether your antivirus systems are properly configured against malware.

Who Should Perform Your Organization’s Cyber Risk Assessment?

A dedicated internal team should take ownership over the risk assessment process. The process will require technical personnel with a deep understanding of the organization’s IT infrastructure. Executive stakeholders should also be involved because they understand how information flows in the context of the organization’s business logic, and can provide broad insight into its risk management strategy.

Small businesses may not have the resources necessary to conduct a comprehensive risk analysis internally. While a variety of assessment tools and solutions are available on the market, partnering with a reputable managed security service provider is the best way to ensure an accurate outcome. Adhering to a consistent methodology is vital, and experienced vulnerability assessment professionals ensure the best results.

How to Conduct a Network Security Risk Assessment

1. Develop a comprehensive asset map

The first step is accurately mapping out your organization’s network assets. If you don’t have a clear idea of exactly what systems, tools, and applications the organization uses, you won’t be able to manage the risks associated with them.

Keep in mind that human user accounts should be counted as assets as well. The Verizon 2023 Data Breach Investigation Report shows that the human element is involved in more than a quarter of all data breaches. The better you understand your organization’s human users and their privilege profiles, the more effectively you can protect them from potential threats and secure critical assets effectively.

Ideally, all of your organization’s users should be assigned and managed through a centralized system. For Windows-based networks, Active Directory is usually the solution that comes to mind. Your organization may have a different system in place if it uses a different operating system.

Also, don’t forget about information assets like trade secrets and intellectual property. Cybercriminals may target these assets in order to extort the organization. Your asset map should show you exactly where these critical assets are stored, and provide context into which users have permission to access them.

Log and track every single asset in a central database that you can quickly access and easily update. Assign security value to each asset as you go and categorize them by access level. 

Here’s an example of how you might want to structure that categorization:

• Public data. This is data you’ve intentionally made available to the public. It includes web page content, marketing brochures, and any other information of no consequence in a data breach scenario.

• Confidential data. This data is not publicly available. If the organization shares it with third parties, it is only under a non-disclosure agreement. Sensitive technical or financial information may end up in this category.

• Internal use only. This term refers to data that is not allowed outside the company, even under non-disclosure terms. It might include employee pay structures, long-term strategy documents, or product research data.

• Intellectual property. Any trade secrets, issued patents, or copyrighted assets are intellectual property. The value of the organization depends in some way on this information remaining confidential.

• Compliance restricted data. This category includes any data that is protected by regulatory or legal obligations. For a HIPAA-compliant organization, that would include patient data, medical histories, and protected personal information.

This database will be one of the most important security assessment tools you use throughout the next seven steps.

2. Identify security threats and vulnerabilities

Once you have a comprehensive asset inventory, you can begin identifying risks and vulnerabilities for each asset. There are many different types of tests and risk assessment tools you can use for this step. Automating the process whenever possible is highly recommended, since it may otherwise become a lengthy and time-consuming manual task.

Vulnerability scanning tools can automatically assess your network and applications for vulnerabilities associated with known threats. The scan’s results will tell you exactly what kinds of threats your information systems are susceptible to, and provide some information about how you can remediate them.

Be aware that these scans can only determine your vulnerability to known threats. They won’t detect insider threats, zero-day vulnerabilities and some scanners may overlook security tool misconfigurations that attackers can take advantage of.

You may also wish to conduct a security gap analysis. This will provide you with comprehensive information about how your current security program compares to an established standard like CMMC or PCI DSS. This won’t help protect against zero-day threats, but it can uncover information security management problems and misconfigurations that would otherwise go unnoticed.

To take this step to the next level, you can conduct penetration testing against the systems and assets your organization uses. This will validate vulnerability scan and gap analysis data while potentially uncovering unknown vulnerabilities in the process. Pentesting replicates real attacks on your systems, providing deep insight into just how feasible those attacks may be from a threat actor’s perspective.

When assessing the different risks your organization faces, try to answer the following questions:

• What is the most likely business outcome associated with this risk?

• Will the impact of this risk include permanent damage, like destroyed data?

• Would your organization be subject to fines for compliance violations associated with this risk?

• Could your organization face additional legal liabilities if someone exploited this risk?

3. Prioritize risks according to severity and likelihood

Once you’ve conducted vulnerability scans and assessed the different risks that could impact your organization, you will be left with a long list of potential threats. This list will include more risks and hazards than you could possibly address all at once. The next step is to go through the list and prioritize each risk according to its potential impact and how likely it is to happen.

If you implemented penetration testing in the previous step, you should have precise data on how likely certain attacks are to take place. Your team will tell you how many steps they took to compromise confidential data, which authentication systems they had to bypass, and what other security functionalities they disabled. Every additional step reduces the likelihood of a cybercriminal carrying out the attack successfully.

If you do not implement penetration testing, you will have to conduct an audit to assess the likelihood of attackers exploiting your organization’s vulnerabilities. Industry-wide threat intelligence data can give you an idea of how frequent certain types of attacks are.

During this step, you’ll have to balance the likelihood of exploitation with the severity of the potential impact for each risk. This will require research into the remediation costs associated with many cyberattacks.

Remediation costs should include business impact – such as downtime, legal liabilities, and reputational damage – as well as the cost of paying employees to carry out remediation tasks. 

Assigning internal IT employees to remediation tasks implies the opportunity cost of diverting them from their usual responsibilities. The more completely you assess these costs, the more accurate your assessment will be.

4. Develop security controls in response to risks

Now that you have a comprehensive overview of the risks your organization is exposed to, you can begin developing security controls to address them. These controls should provide visibility and functionality to your security processes, allowing you to prevent attackers from exploiting your information systems and detect them when they make an attempt.

There are three main types of security control available to the typical organization:

• Physical controls prevent unauthorized access to sensitive locations and hardware assets. Security cameras, door locks, and live guards all contribute to physical security. These controls prevent external attacks from taking place on premises.

• Administrative controls are policies, practices, and workflows that secure business assets and provide visibility into workplace processes. These are vital for protecting against credential-based attacks and malicious insiders.

• Technical controls include purpose-built security tools like hardware firewalls, encrypted data storage solutions, and antivirus software. Depending on their configuration, these controls can address almost any type of threat.

These categories have further sub-categories that describe how the control interacts with the threat it is protecting against. Most controls protect against more than one type of risk, and many controls will protect against different risks in different ways. Here are some of the functions of different controls that you should keep in mind:

• Detection-based controls trigger alerts when they discover unauthorized activity happening on the network. Intrusion detection systems (IDS) and security information and event management (SIEM) platforms are examples of detection-based solutions. When you configure one of these systems to detect a known risk, you are implementing a detection-based technical control.

• Prevention-based controls block unauthorized activity from taking place altogether. Authentication protocols and firewall rules are common examples of prevention-based security controls. When you update your organization’s password policy, you are implementing a prevention-based administrative control.

• Correction and compensation-based controls focus on remediating the effects of cyberattacks once they occur. Disaster recovery systems and business continuity solutions are examples. When you copy a backup database to an on-premises server, you are establishing physical compensation-based controls that will help you recover from potential threats.

5. Document the results and create a remediation plan

Once you’ve assessed your organization’s exposure to different risks and developed security controls to address those risks, you are ready to condense them into a cohesive remediation plan. You will use the data you’ve gathered so far to justify the recommendations you make, so it’s a good idea to present that data visually.

Consider creating a risk matrix to show how individual risks compare to one another based on their severity and likelihood. High-impact risks that have a high likelihood of occurring should draw more time and attention than risks that are either low-impact, unlikely, or both.

Your remediation plan will document the steps that security teams will need to take when responding to each incident you describe. If multiple options exist for a particular vulnerability, you may add a cost/benefit analysis of multiple approaches. This should provide you with an accurate way to quantify the cost of certain cyberattacks and provide a comparative cost for implementing controls against that type of attack.

Comparing the cost of remediation with the cost of implementing controls should show some obvious options for cybersecurity investment. It’s easy to make the case for securing against high-severity, high-likelihood attacks with high remediation costs and low control costs. Implementing security patches is an example of this kind of security control that costs very little but provides a great deal of value in this context.

Depending on your organization’s security risk profile, you may uncover other opportunities to improve security quickly. You will probably also find opportunities that are more difficult or expensive to carry out. You will have to pitch these opportunities to stakeholders and make the case for their approval.

6. Implement recommendations and evaluate the effectiveness of your assessment

Once you have approval to implement your recommendations, it’s time for action. Your security team can now assign each item in the remediation plan to the team member responsible and oversee their completion. Be sure to allow a realistic time frame for each step in the process to be completed – especially if your team is not actively executing every task on its own.

You should also include steps for monitoring the effectiveness of their efforts and documenting the changes they make to your security posture. This will provide you with key performance metrics that you can compare with future network security assessments moving forward, and help you demonstrate the value of your remediation efforts overall.

Once you have implemented the recommendations, you can monitor and optimize the performance of your information systems to ensure your security posture adapts to new threats as they emerge. Risk assessments are not static processes, and you should be prepared to conduct internal audits and simulate the impact of configuration changes on your current deployment. You may wish to repeat your risk evaluation and gap analysis step to find out how much your organization’s security posture has changed.

You can use automated tools like AlgoSec to conduct configuration simulations and optimize the way your network responds to new and emerging threats. Investing time and energy into these tasks now will lessen the burden of your next network security risk assessment and make it easier for you to gain approval for the recommendations you make in the future.