Interscale Content Hub – Do you know which types of IT risks are the most dangerous? Or which one we should be paying more attention to?
There are lots of different types of IT risks, and we need to be aware of them all.
These types of IT risks, which can range from data breaches and system failures to regulatory non-compliance and financial losses, always threaten an organisation’s operations, reputation, and profits.
That’s why we’re going to look at everything from cybersecurity threats and operational vulnerabilities to the financial, legal and environmental implications from all types of IT risks.
Categories of IT Risks
1. Cybersecurity Risks
The digital landscape is full of threats that try to exploit weaknesses in your IT systems.
These threats are looking to breach data integrity, confidentiality and availability, which could have a big impact on an organisation’s critical assets.
The 2017 WannaCry ransomware attack, which affected over 200,000 computers globally, shows just how damaging cyber threats can be.
This attack had a big impact on lots of different industries, including healthcare and finance. It really shows why it’s so important to have strong cybersecurity measures in place.
And we all know that the financial impact of cybersecurity risks can be huge.
For instance, the average cost of a data breach in Australia was a whopping $2.78 million, as shown in the IBM Cost of a Data Breach Report 2024.
In their study “Risks Assessment of Information Technology Processes Based on COBIT 5 Framework: A Case Study of ITS Service Desk,” Hanim Maria Astuti and colleagues show how it’s crucial to spot and deal with IT risks to avoid hiccups in business processes.
The COBIT 5 framework is used to manage and assess risks, ensuring that IT operations are secure and efficient.
2. Operational Risks
Operational risks are about things going wrong with how we do things inside the business, or with the systems we use, or with the people we work with, that could mess up how we do business.
These risks are often linked to system outages, hardware failures, or software glitches.
For example, the British Airways IT outage in May 2017 meant no flights from London’s Heathrow and Gatwick airports, affecting around 75,000 passengers.
This shows just how much of an impact operational risks can have on the services we provide.
The study by William Harris and Moufida Sadok, “How do professionals assess security risks in practice? An exploratory study,” found how many companies manage operational risks by doing structured risk assessments and using management practices.
The study showed that having the same words and ways of doing risk assessments would help improve how we manage operational risks.
3. Compliance Risks
In Australia, where business is heavily regulated, not sticking to the rules can lead to legal penalties, damage to your reputation and operational disruptions.
The Australian Privacy Act 1988, with its hefty penalties of up to $50 million for serious breaches, is a good reminder of why it’s so important to comply.
The National Institute of Standards and Technology (NIST) says in its “Risk Management Guide for Information Technology Systems,” how compliance is one of the most important things to think about when managing risks.
NIST says organisations should do regular risk assessments to spot potential compliance issues and put the right controls in place to deal with them.
A good example of this is the fine Facebook got for privacy violations under the GDPR in 2018.
4. Strategic Risks
The decisions you make today about your IT infrastructure can have a big impact on your business in the long run.
These types of IT risks can come from using new tech or business models that don’t work out as planned.
Or, if you fall behind the tech curve or become too reliant on one supplier, you’ll struggle to innovate and compete.
Therefore, NIST says businesses should think about the risks of technology becoming out of date and relying too much on one supplier.
As an example, the first launch of Healthcare.gov in October 2013 had some big technical problems because it wasn’t properly tested and there wasn’t enough planning to make it scalable.
The website got a lot more traffic than it was expecting, which led to it crashing and having usability problems.
These problems showed us just how important it is to manage all types of IT risks in large projects.
5. Financial Risks
All of the types of IT risks above have a direct impact on your financial health. Fraud, embezzlement, and bad tech investments also can lead to big losses.
For example, a major data breach can lead to significant financial losses, which can affect an organisation’s profits.
Start-ups, with their limited resources, are particularly at risk of these financial issues.
The study by Astuti et al. shows how important it is to assess and manage risks to protect your financial interests.
So, NIST has put together a framework for assessing and reducing financial risks in IT.
It shows that it’s important to have affordable security controls to protect mission-critical information and IT systems.
You may find it helpful to read “IT Audit Risk Assessment: Techniques, Tools, & Best Practices.”
6. Environmental Risks
Natural disasters, power cuts and the long-term effects of climate change can mess up your IT infrastructure, or even destroy it completely.
The NIST guideline mentions floods, fires and earthquakes as potential threats, and also points out that you should think about the environment when you’re assessing the risks.
The Harris and Sadok study also shows how you should think about environmental risks in the context of overall operational risk management.
This means looking at how environmental changes could affect IT systems and putting plans in place to keep the business running smoothly.
Emerging IT Risks
The classic cybersecurity threats are still around, but now we’ve got to deal with new challenges from cutting-edge tech like AI, the Internet of Things, cloud computing and even quantum computing.
Hanim Maria Astuti and her colleagues show how the complexity of IT processes and the speed at which technology evolves mean that we need to keep on assessing the risks and adapting to emerging threats.
There’s a growing concern among experts about the potential for AI and machine learning systems to make biased or discriminatory decisions, or to be misused for malicious purposes.
As companies start using AI and ML to improve their operations and gain valuable insights, they also have to manage the risks associated with these technologies.
The NIST says it’s crucial to think about these new risks when you’re putting together your overall risk management strategy.
On the other side, the Internet of Things (IoT) is all about connecting devices in new ways, and it offers huge potential for innovation.
But it also means there’s a huge opportunity for cybercriminals to attack.
IoT devices can be hacked to gain access to networks or sensitive data.
The study by Hanim Maria Astuti et al. shows that we need to make sure we have strong security measures in place to protect IoT devices and the data they generate.
On the other hand, cloud computing has its own set of risks. It’s great for scaling up and saving money, but it can also lead to data breaches and loss of control over sensitive information stored off-premises.
What’s more, the pandemic has made these risks even worse by making digital transformation and remote working happen faster.
Harris and Sadok’s study shows how the move to remote working has made companies more vulnerable, as many weren’t ready for the sudden change and didn’t have the right security set-up in place.
Risk Assessment and Management
The key to managing all types of IT risks effectively is having a solid risk assessment process in place.
This means working through a list of potential threats to your IT systems, evaluating them and then ranking them in order of likelihood.
The NIST offers a nine-step process for this, which is pretty detailed. It’s all about understanding the weak spots in your system, spotting threats, and looking at what could happen if someone got in.
However, research by Harris and Sadok shows there’s a gap between what’s taught in theory and how it’s actually done in practice.
The study found that security pros don’t agree on basic terms or how to use standard risk assessment methods.
This shows that we need to make sure we’re all on the same page when it comes to communication, using the same terms and following a structured approach.
The study by Astuti et al., gives a great practical example of using the COBIT 5 framework to identify and assess risks in an IT service desk.
Astuti et al., show how you can use current processes to map out the ideal ones and uncover risks in the process.
The research also shows that it’s important to quantify risks by assessing how often they happen and how serious they are, so you can decide which risks to tackle first.
At the same time, effective risk management is about more than just assessing risks. It’s also about taking steps to reduce them before they become problems.
This means putting controls – technical, managerial or operational – in place to reduce the likelihood or impact of the risks we’ve identified.
Astuti and colleagues’ study gives you a full overview of the different control categories and how to put them into practice.
The trick is to find a balance between risk mitigation and operational efficiency. You can use cost-benefit analyses to justify control implementation.
It’s important to understand that some residual risk is always going to be around.
The aim is to get this down to an acceptable level, so your business can keep on operating securely despite the ever-changing IT threats.
For further information, please refer to “Risk Assessment IT Security: Process, Best Practices, Tools, & Techniques.”
How to Simplify All The Complexities of IT Risk Assessment & Management Above?
Interscale make it easier for you to comply with the rules, spot the different types of IT risks, and help you decide where to focus your security efforts.
We work closely with you to understand your business and develop a cybersecurity strategy that’s right for you.
We also run training programmes to help your employees spot and deal with cyber threats before they become problems.
For instance, we’ve helped companies like Davey Water Products beat some big cybersecurity issues, making sure their systems and data are safe.
If you’d like to get a feel for how we can help you, we’d suggest taking a look at our Interscale IT Risk Assessment Services page here.
Or perhaps you’d like to grab a coffee and croissants? We’d love to catch up with you and discuss your specific risk assessment issues
We’ll also show you how Interscale can serve as your one-stop Cybersecurity support system.
In Closing
If you use established frameworks like COBIT 5 and follow the risk assessment methods set out by NIST, you can identify, evaluate and tackle these risks in a systematic way.
For Australian businesses, keeping on top of these new IT risks is not just a good idea – it’s essential.
It’s a must for keeping operations safe and making sure you stay successful in an environment where many types of IT risks are always evolving.
