Strategic Data Risk Management: Aligning Risk with Business Objectives

Protect your business from data breaches, privacy violations, and cyberattacks. Learn how strategic data risk management aligns with business objectives & builds customer trust.

Businesses today leverage data to help improve their operational capabilities. Every business area – from finance and product development to sales and marketing – relies on the collection and integrity of multiple data sources.

Unfortunately, this reliance on data digitization and storage has brought with it a number of inherent risks. Today, modern businesses face a range of threats, including data breaches, privacy violations, and cyber theft. All of these can have long-term negative impacts on an organization’s viability, especially when relating to its financial stability and reputation with customers.

For businesses to stay successful, it’s important to not only recognize the various forms of data risk they have but also put into practice certain risk management efforts that align with short- and long-term business objectives.

The Business Impact of Data Risks

With data being such a valuable asset for not only businesses but anyone outside an organization as well, there are a certain number of risks when storing it. Some of these risks include:

Ongoing Cybersecurity Threats – There are a growing number of cyber threats looming today that companies need to be aware of. Company data breaches, denial-of-service attacks, and ransomware can all have major implications when protecting company data and maintaining its integrity.
Data Privacy Violations – Businesses have a heavy responsibility placed on them by regulatory bodies when it comes to keeping customer data safe. Failure to meet various data governance standards can lead to serious financial ramifications, especially when data is compromised due to company negligence.
Quality Issues – As data moves in and out of company systems and loses a strict chain of custody, it becomes easier for data quality to suffer. Data inaccuracies – whether due to human error or inconsistent collection methods – can present major issues when needing to rely on information in the future.

How Data Risks Can Impact Businesses

Data risks, when left unaddressed, can lead to a number of drawbacks for a business, including:

Financial Loss

Data integrity is often tied to the financial success of a business. When data becomes compromised for any reason, it can quickly lead to significant financial losses as a result of lost revenues or added costs used for data recovery or other remediation efforts.

Reputational Damage

Customers trust that the businesses they engage with will have adequate protections in place when collecting and storing their private information. If this trust is broken due to inadequate security measures that lead to data theft, it can quickly erode a business’s reputation and make it very difficult for an organization to gain that trust back.

Operational Disruptions

Data issues can lead to major disruptions to critical business operations. When this happens, it can lead to significant company downtime – impacting order processing and deliveries, addressing customer service issues, or maximizing sales and marketing efforts.

Core Elements of Strategic Data Risk Management

To minimize exposure to data risk issues, it’s important to establish a strategic data risk management plan for the business. Below are some of the core elements of creating a successful strategy:

Alignment with Business Objectives

Keeping your data risk under control requires you to keep your efforts in alignment with your overarching business objectives. This is done by understanding the role that data plays in the general success of your organization. Identify which data assets are most critical, including customer data, financial states, intellectual property, and other essential information. With these in mind, you’re able to prioritize various risk mitigation efforts appropriately.

Proactive Risk Assessments

The worst thing a business can do is wait for data incidents to occur before they prioritize various protective actions. Proactive risk assessments help to recognize potential threats before they occur. Regular assessments of data risk should be conducted throughout the year across multiple departments. Both internal and external threats should be considered along with the risk severity that any of these presents business viability.

Comprehensive Risk Mitigation Processes

Businesses should develop a thorough risk mitigation strategy based on the findings from their assessments. These involve putting into place a combination of technical, administrative, and physical controls designed to protect the accuracy and integrity of company data. It’s also important to educate employees on the certain data risks that can occur over time and how to actively mitigate those risks from happening.

Making Data Risk Management Part of Your Business Workflows

Integrating data risk management into your daily business workflows is essential for ensuring you’re able to minimize potential data issues. Here’s how are some key areas for achieving this:

Data Governance Frameworks

Utilizing data governance frameworks helps to provide a more structured approach when managing data throughout its lifecycle. Part of following these frameworks requires you to clearly define various roles and responsibilities for data management, ensuring that everyone understands their role in protecting data assets.

You also should be developing data quality standards and procedures to help keep your data accurate, complete, and consistent at all times. This includes evaluating supporting technologies and workflows to ensure they’re meeting legal and ethical standards and implementing data retention and disposal policies effectively.

Operational Security Measures

Integrating security controls into your daily operations and workflows is also important to ensure that data is protected at every stage. Businesses should implement access controls to restrict access to sensitive data based on the principle of least privilege, which only gives visibility to information when actually needed.

Another important element of minimizing data risk is to use encryption to protect data both in transit and at rest. This helps prevent unauthorized access to sensitive information even if a data breach occurs.

Incident Response Planning

Creating a comprehensive incident response plan to address data breaches and other security incidents is critical for businesses. This plan should outline procedures for incident reporting, investigation, and recovery in the event of cyberattacks or other major disruption events.

It’s important to establish clear communication channels and escalation procedures to ensure that incidents are reported and addressed as quickly as possible. The plan should also include procedures for data recovery, system restoration, and communication with affected parties.

Keep Your Data Protected

A proactive approach to data risk management is critical for modern organizations that regularly rely on data to maximize their operational capabilities. By aligning risk mitigation efforts with ongoing business objectives, organizations can effectively protect their valuable data assets while ensuring they continue to build and maintain customer trust as they scale.

Author Bio Information

Author Bio:

Nazy Fouladirad is President and COO of Tevora, a global leading cybersecurity consultancy. She has dedicated her career to creating a more secure business and online environment for organizations across the country and world. She is passionate about serving her community and acts as a board member for a local nonprofit organization.

Linkedin: https://www.linkedin.com/in/nazy-fouladirad-67a66821

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