What is Data Risk Management? Why You Should Care?

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Written By Haissam Abdul Malak

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Data is going unwatched and unprotected in the workplace. Companies are getting hacked and information is leaked on a regular basis, which leads to significant losses in reputation, revenue, and customer trust. Business leaders must take charge and guard their data.

Data Risk Management is a process that identifies and assesses the risks to an organization’s information assets and then implements appropriate mitigation strategies to reduce or eliminate those risks.

Data risk management is an important part of any business, especially in the digital age where information is shared so easily and quickly. It involves data protection, information security RM, and privacy policies, as well as employee training on how to handle sensitive information.

A breach can be caused by a variety of factors such as hacking, human error or natural disasters. It can have a range of consequences from public embarrassment to lawsuits or fines from regulatory authorities. It can also lead to identity theft which can be financially costly for individuals and businesses alike.

During the second quarter of 2022, internet users worldwide saw approximately 52 million data breaches, down by 56 percent compared to the previous quarter. In the measured period, the highest number of data breaches was detected in the fourth quarter of 2020, nearly 125 million cases.

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Data risk management

Why data risk management is important for organizations?

Data risk management is an important part of a company’s information security strategy. Data is the backbone of any organization and it is critical to protect this data from cyber threats.

Data risk management helps organizations in the following ways:

1- It provides a holistic view of the data that can be used to make informed decisions on what needs to be protected.

2- It helps in identifying and prioritizing risks that are faced by an organization.

3- It helps in understanding how data flows through different systems and how they are used by various departments within an organization.

4- It also helps in assessing the impact of different types of risks, such as natural disasters, human errors, malware attacks, etc.

5- Finally, it also assists in implementing strategies that can help mitigate these risks

What are key data risks?

Data is the core of every business. Organizations are not safe from data risks. Data breaches, data loss, and other data-related risks can lead to significant losses.

The key data risks are data breaches, data loss, data manipulation, and data exposure. If not managed and planned correctly, they can lead to significant losses for organizations in term of trust, financial, and reputation.

Here are the list of different types of data risks:

1- Data breaches

When hackers steal or corrupt sensitive information stored on a company’s servers or databases.

2- Data loss

When an organization’s employees lose a laptop or USB drive containing sensitive information.

There are lots of ways to help recover data from potential losses. The responsible team should prepare a clear strategy and inform employees how to handle data in addition to creating a regular data backup plan.

3- Data manipulation

When an organization’s employees change some of the information they store on their servers or databases to benefit themselves or others

It can be detrimental for an organization. There are a variety of reasons why employees manipulate data, but the most common are to create an illusion of productivity and to make their bosses happy. Data manipulation can be prevented if managers and supervisors are aware of the issue and take action when they see it happening.

4- Data exposure

Organizations are not only collecting data about a person, but also exposing it. Data exposure includes unauthorized access to sensitive data, information like personally identifiable information (PII), financial information and more. Organizations must take a proactive approach when it comes to protecting the sensitive data they collect and store.

5- Data rot

Data rot is a process that occurs when data is not used for too long. The data becomes obsolete and cannot be used for any meaningful purpose.

Data rot can happen to any kind of data, ranging from customer records to marketing campaigns or even social media posts. Data rot is a problem that organizations need to take care of in order to stay in business.

6- Data corruption

Data corruption is a serious problem in the world of information technology. The consequences are not only limited to the organization that has been affected by this issue but also to the users who have been relying on that data for their work or personal needs. It can happen due to many reasons such as hardware failure, software malfunction, power outage, virus attack and human error.

How do you mitigate data management risk?

Data breaches are a major concern for companies and individuals. They can be caused by a variety of factors, including human error, natural disasters, hacking, and cyber attacks.

Data management risk is the likelihood that data will be lost or stolen by hackers or other malicious actors.

There are four main ways to mitigate data management risk: encryption, backups, strong passwords, and firewalls. These four methods should be well defined in an organization data management strategy and policies.

The best way to manage data risk is by carefully planning ahead of how your data will be accessed, by whom, how it will be shared and collected.

1- Encryption

Encryption is the process of encoding information so it cannot be read without special knowledge (a key). It protects sensitive information from being accessed by unauthorized personnel or systems.

2- Backups

Backups are copies of data that can be used if the original data is lost or corrupted. Strong passwords help keep your account more secure because they require more effort to guess than weak passwords do.

3- Strong passwords

Strong passwords help keep your account more secure because they require more effort to guess than weak passwords do

4- Firewalls

Firewalls restrict access to your data by restricting access to your computer or device.

To protect your data from leaks, you should employ different security methods including strong passwords, firewalls, and two way authentication.

Data risk management best practices

The first step in the process is identifying what data needs to be protected. This includes not only identifying the value of the data but also who has access to it and how it’s stored.

Once an organization knows what data they need to protect they can then assess how vulnerable it is. This involves looking at who has access to it, how it’s stored, if there are any vulnerabilities in its infrastructure, and more.

Finally, an organization can implement measures or controls that will help mitigate their risk of a breach or loss event occurring. These may include encryption or access controls as well requiring two-factor authentication.

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