The rapid digital transformation has redefined how businesses function—operations are more streamlined, and productivity has improved. However, it has also brought forth a formidable challenge—cybersecurity risk. In recent years, cases of cyberattacks have been on the rise. In fact, according to a recent study, global cyberattacks increased by 38% in 2022.
As a cybersecurity professional, you know that managing risk is an essential part of your job. But how do you ensure that you’re taking a comprehensive approach to risk management? The answer lies in integrated risk management (IRM). This post will walk you through the six attributes of integrated risk management.
But first, a quick look at what integrated risk management is.
What Is Integrated Risk Management (IRM)?
Integrated risk management is an evolving discipline that takes into account the interconnections between different types of risks, including operational, financial, strategic, reputational, and cybersecurity risks. By incorporating these risks into a single, integrated framework, organizations can make more informed decisions about risk mitigation and avoid siloed approaches that may overlook critical risks.
Six Key Attributes of Integrated Risk Management
Here are the six attributes of integrated risk management:
1. Holistic Approach
Integrated risk management is a holistic approach to risk management that considers risks across the entire organization. This includes risks related to people, processes, and technology. By taking a holistic approach, organizations can identify risks that may be hidden in silos or outside of traditional risk management frameworks.
Integrated risk management relies on data to identify, assess, and manage risks. This includes internal and external data sources, such as operational data, financial data, and threat intelligence. By analyzing data in real-time, organizations can quickly detect and respond to emerging risks.
3. Continuous Monitoring
Integrated risk management requires continuous monitoring of risks, both internal and external. This means using tools and technologies to monitor for threats and vulnerabilities in real-time. By continuously monitoring risks, organizations can respond promptly to potential threats and prevent or mitigate the impact of a risk event.
But don’t take our word for it. According to ISACA, continuous monitoring is a critical component of integrated risk management. It helps organizations to stay ahead of emerging risks and take proactive measures to mitigate those risks.
Integrated risk management requires collaboration across different departments and teams within an organization. This includes risk management, cybersecurity, finance, legal, and other functions. When departments within an organization collaborate on risk management, they can collectively identify and assess risks more effectively and develop more robust risk management plans.
Integrated risk management requires a flexible approach that can adapt to changing risks and circumstances. This means continually reviewing and updating risk management plans to reflect new threats, technologies, and business practices.
Integrated risk management requires advanced technologies and tools to identify, assess, and manage risks. This includes risk assessment software, threat intelligence platforms, and other technologies that can automate risk management processes and provide real-time risk insights.
Approaches to Integrated Risk Management
The approaches to integrated risk management include:
Enterprise Risk Management (ERM): ERM is a top-down approach to IRM, which involves the identification and management of risks across the entire organization. ERM is designed to provide a holistic view of risks and their interdependencies and to align risk management with the organization’s strategic objectives. ERM typically involves the identification of risks, risk assessment, risk mitigation, and ongoing monitoring and reporting.
Operational Risk Management (ORM): ORM is a bottom-up approach to IRM, which focuses on managing risks associated with specific business processes, systems, or activities. ORM is typically used in operational areas such as finance, supply chain, or information technology. The goal of ORM is to identify, assess, and mitigate risks in operational areas to ensure that the organization’s objectives are met.
Governance, Risk, and Compliance (GRC): GRC is a framework that integrates governance, risk management, and compliance activities across an organization. GRC is designed to ensure that an organization complies with regulations, laws, and standards while managing risks and achieving its objectives. GRC typically involves the identification of risks, risk assessment, risk mitigation, and ongoing monitoring and reporting.
Cybersecurity Risk Management: Cybersecurity risk management is a specialized approach to IRM that focuses on identifying, assessing, and mitigating cybersecurity risks. Cybersecurity risk management involves identifying and assessing cybersecurity risks, developing risk mitigation strategies, and implementing measures to protect against cybersecurity threats.
Benefits of Integrated Risk Management to an Organization
The benefits of integrated risk management include:
Improved Risk Management
By integrating all types of risks into a holistic framework, IRM enables organizations to identify, assess, and manage risks more effectively. As such, it leads to a better understanding of the risks facing the organization and the development of more robust risk management strategies.
IRM enables organizations to respond more quickly to emerging risks and changing business environments. By continuously monitoring risks and updating risk management plans, organizations can adapt to changing circumstances and mitigate the impact of risk events.
Enhanced Decision Making
IRM provides organizations with a comprehensive view of risk, enabling them to make more informed decisions about risk mitigation. By analyzing risk data in real-time, organizations can make decisions based on up-to-date information rather than relying on outdated or incomplete risk assessments.
Integrated risk management is a comprehensive approach to risk management that considers all types of risks across the organization. By adopting an integrated risk management approach that is data-driven, continuous, collaborative, flexible, and technology-enabled, organizations can make better decisions about risk mitigation and avoid siloed processes that may overlook critical risks.