In June 2022, international airline company Pegasus discovered that 23 million files were available to the public due to an employee error. Data like flight information, navigation guidance, and the personal information of the crew were all available – exposing the company to an abundance of cyber risks. Without internal controls, cyber training, and best practices like Trustpair’s monitoring program, organizations risk falling victim just like Pegasus’ system. Or worse, to intentional attacks by experienced cybercriminals. In this article, learn how to protect your business with cyber risk management best practices.
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What is cyber risk management?
Cyber risks are all of the potential vulnerabilities to your company that originate from a digital capacity – cyber fraud. Social engineering, coding errors and malware can all result in cyber fraud, leading to potential financial losses and reputational damage.
Cyber risk management therefore refers to the measuring and monitoring of the risks associated with threats like email security, software coding and internal decisions. The aim is to prevent these risks from turning into incidents. Managing (and anticipating) the cyber risks enables an organization to operate smoothly and helps overcome challenges when they occur.
It’s about creating a plan and managing any potential scenario.
Fraud risk management is an integral process to businesses of all sizes, from startups to enterprises. But of course, as organizations grow, what they have to lose also grows. In fact, we can confirm that fraud has definitely entered the cyber era, with 83% of companies targeted by cyber fraudsters.
Therefore, companies with the resources to invest into cyber risk management should do so in order to protect their privacy, operations, and assets from harm and vulnerability.
Trends and challenges of cyber risks
With the majority of US businesses targeted by cyber fraudsters, it’s interesting to note the trends and behaviors used. Insights into these factors can help organizations build their anti-fraud strategies, and operate with confidence against the cyber risks.
Fraud channels
Knowing that cyber fraud means digital – it may seem obvious that protecting your computer and online-based systems is the most critical against an attack, right?
Instead, Trustpair’s 2024 Fraud Report found that 50% of cyber fraudsters are choosing to dupe their victims with fake text messages. Common techniques for attack include authorized push payments and impersonation scams.
Internet channels come close behind, with 48% of companies targeted through fake websites. This indicates that phishing and social engineering techniques are still a very popular method of manipulation for the bad actors.
Finally, 39% of fraudsters are using a method which many believe is now outdated – phone calls. With the deep fake AI resources available these days, they’ve managed to clone the voice of senior employees and ask their colleagues to make transfers, or share access to certain information.
Third party impact
Our fraud study also highlighted that 66% of businesses would stop working with a partner if they fell victim to fraud and lost their payment. For most of these business partners, the main worry would not be the lost funds, but the reputational damage associated with fraud.
And Trustpair’s CEO, Baptiste Collot, explains why supplier fraud is such a concern:
“Suppliers are more and more targeted by cyber-attacks that actually target the buying companies. It’s important to work with companies that have strong cybersecurity measures set up to avoid being defrauded through your supplier – without him even knowing.”
‘It won’t happen to me’ mindset
Although business people in all departments are aware of the risks of cyber fraud, it’s not really the priority at their companies. For example, 67% believe that the impact of cyber fraud will increase, but only 28% of companies have invested in fraud prevention systems to identify and protect against it.
Even more shocking, though, is that the most commonly listed fraud mitigation process is a manual double check!
Without prioritizing security risks, fraud detection and prevention, the ‘it won’t happen to me’ mindset could turn into ‘it happened’ rather quickly.
What is the cyber risk management process?
Depending on the industry in which you work, there are several compliance frameworks for cyber risk management. For example, ISO 27001, NIST CSF and DOD RMF all exist to guide businesses through their cyber risk assessment and management process, and companies under compliance may have to follow one of these.
If you’re not under compliance though, here’s a good plan to follow:
- Identify the risks
- Assess
- Control and mitigate
- Monitor and iterate
Identify
Identifying cyber risks begins with a risk assessment. Decide which parts of your business rely on cyber tools to operate, and examine how secure those tools are.
For example, if you outsource your email marketing to a third party provider, it’s worth checking what security measures that provider uses. Because if a hacker can bypass their two-factor authentication, they could gain access to your entire customer base.
Without further detection measure, the fraudster could be free to ask you customers for their personal information or financial data, ripping off your customers as they go.
Assess
Assessing the risks is about determining the vulnerabilities that exist around your cyber programs. It’s also important to consider how you will react if such tools become compromised.
Dependency mapping is the best practice for this type of risk assessment, since you can concretely see which platforms rely on one another. If one becomes compromised, you should have the information at hand to close its access to other platforms.
By planning this assessment, companies can strengthen their operational resilience, even under a direct cyber threat.
Control
Controlling cyber risks is the next step, and its purpose is to remove as much of the uncertainty as possible. Not only does this mean planning and response methods, but also pre-empting the vulnerabilities and plugging those holes in advance.
Scenario or stress testing is a great way to control the variables, drill your employee response and figure out if any of your controls are missing. These days, many CEOs will send fake phishing emails like gift card requests to check whether their employees question the request, or comply. This is a good way to test receptiveness to cyber risks, and put new controls in place.
Monitor and iterate
For the final part of this framework, cyber risk monitoring reflects the need to continuously track your cybersecurity for its normal patterns, and detect once suspicious activity occurs. Iteration is about remaining flexible to change your strategy if it’s not as effective as new threats emerge.
For example, new AI software allows fraudsters to impersonate the voice of a CEO. If the CEO’s access to your business bank account relies on voice activation, you’ll need to review and edit your strategy to protect the online banking portal.
Cyber risk management best practices
Some of the best practices for cyber risk management include:
- Cyber training programs
- Restricted security access
- Automated finance controls
Cyber training programs
Building a security-centered culture at work is one of the most effective ways to prevent cyber risks turning into incidents. 96% of both leadership and junior staff across IT departments would agree that a strong cybersecurity culture is very important.
It’s best to lead from the top, involving senior management in the training as it gets rolled out across the departments. In the same study referenced before, 72% of senior managers said they were in favor of such training, because they understand the benefits.
Restricted security access
Building barriers around your sensitive information or financial accounts is another great way to protect your organization against cyber fraudsters.
For example, even if an employee gets duped into revealing their login credentials, two-factor authentication could still prevent access to the wrong person.
A standardized approach to cybersecurity, such as a framework, can also work as a form of internal control. By helping your team to behave in a specific way, the risks have already been assessed and managed. Therefore, internal controls are helpful in preventing unexpected vulnerabilities, especially during cyber processes.
Automated finance controls
Automated controls are another of the best ways to protect your business against the growing cyber threats of today.
For example, fraudsters could compromise a vendor’s email and send you an invoice to their account instead, disguising it as ‘new account details’. This is called invoice fraud. But with Trustpair’s automated checks for payment details and company account information, you can be sure you’re really paying into their account.
Moreover, Trustpair enables process digitization so that clients can automate as much of their processes as possible, and reduce the human input. This has a twofold effect;
- Reducing the risk of manual errors
- Reducing the opportunities to manipulate staff through social engineering
With automated finance controls like Trustpair’s platform, companies can be confident in their protection against cybersecurity risks, and instead focus on the growth of their operations.
Protecting your business with cyber risk management
Cyber risks are one of the biggest threats to businesses today, and will likely grow as the technology continues to evolve. After risk assessments, controlling the risks will be important as you monitor and react when the risks turn into threats. With training, restricted access and Trustpair’s automated finance controls, you can protect your business against cyber risks.
