How to Identify Information Security Risks in SMEs?

It’s no surprise that cyber criminals often target Small and Medium-sized Enterprises (SMEs). SMEs, too, hold valuable data like large organizations, making them attractive targets. Some SMEs also act as links in a larger supply chain, providing a backdoor to bigger companies.

As an SME grows, so does its exposure to cyber security risks. Many SMEs worldwide face challenges in identifying these risks, often due to limited resources. Some even overlook cyber security entirely, not fully realizing the potential consequences of not prioritizing it. According to ConnectWise Research, 94% of SMEs have faced cyber attacks, underscoring the need for all SMEs to prioritize cyber security risk management.

This article covers one of the methods that SMEs can use to overcome the challenges in identifying information security risks.

What are Information Security Risks?

Information security risks are anything that threatens the confidentiality, integrity, or availability (CIA) of an asset. Here are two examples to illustrate some risks that SMEs may encounter:

Example 1: A small business specializing in e-learning development has a client database that contains personal information. This database, however, is accessible even to employees who do not require it for their jobs. An employee accidentally shares customer data with an external vendor, compromising client privacy and potentially leading to legal action. The risk here is the potential compromise of client privacy and the legal consequences resulting from unauthorized access and sharing of personal data.

Example 2: A mid-sized enterprise developing AI applications relies on the project manager’s laptop to store application blueprints. One day, the laptop suffers a hardware failure, resulting in the loss of this file. This causes delays in deliverables, and risks reputational damage due to missed deadlines. The risk here is the absence of proper backups, leading to data loss and operation disruptions.

SMEs may encounter various risk scenarios like these in their daily operations. Identifying these risks early and putting appropriate controls in place helps SMEs minimize their probability and impact on the business. In fact, managing risks effectively can help improve your SME’s overall cyber security posture.

Steps to Identify Information Security Risks in SMEs

1. Identify and Prioritize Assets

Knowing what assets you have and their importance is essential. It’s impractical to try and protect everything equally, so SMEs need to prioritize their most critical assets.

This is where the CIA (Confidentiality, Integrity and Availability) triad can be useful. The CIA triad helps identify which assets to prioritize by asking these fundamental security-related questions:

• Confidentiality: What would happen if the data was revealed publically?
• Integrity: What would happen if the data was altered?
• Availability: What would happen if the data could no longer be accessed?

This exercise helps identify the most critical assets to an SME. It’s also useful to note both the asset owner (e.g., IT staff is responsible for maintaining a company laptop) and the asset custodian (e.g., an employee who uses that laptop) for each asset. In some cases, the asset owner and custodian can be the same person.

2. Identify Threats to Those Assets

Next, consider the types of harm that could affect each asset. Each asset could face several threats. For instance, consider a laptop used by an employee to store and access sensitive customer information. This laptop could be stolen if left unattended in a public space, potentially exposing sensitive data. It could also be damaged in an accident, leading to hardware failure, making important information inaccessible. By identifying these potential threats, you’re taking the first step in minimizing future security incidents.

3. Identify Vulnerabilities that Threats Could Exploit

Threats often materialize by exploiting weaknesses, known as vulnerabilities. Identify the vulnerabilities each threat could leverage. For example, if an employee’s account is not protected by Multi-Factor Authentication (MFA), it becomes easier for attackers to gain access to their account by exploiting stolen passwords.

To make this step more effective, consider mapping each threat to its potential vulnerabilities. You could also highlight the impact each threat might have on the asset’s confidentiality, integrity, and availability.

4. Identify Consequences of these Threats and Vulnerabilities

Understanding the potential consequences of each threat is essential for prioritizing and mitigating them effectively. Consider the specific impact of each threat: could it lead to data loss, financial damage, or harm to your company’s reputation?

For example, a ransomware attack could prevent access to critical data, affecting the availability of that data and potentially incurring financial loss to restore access. A denial-of-service (DoS) attack, on the other hand, could block access to your website or internal systems, disrupting business operations.

Analyzing the consequences of each threat helps you design controls to reduce their likelihood or impact.

5. Identify the Likelihood of Risks

It’s important to evaluate how likely each risk is to occur. Assessing likelihood helps SMEs focus their efforts on risks that are more probable, enabling them to allocate resources effectively to mitigate these risks. This step ensures that you prioritize risks that are not just impactful but also more likely to happen.

For example, if your SME stores critical data on a laptop without regular backups, the likelihood of data loss due to hardware failure increases over time. By implementing periodic backups, you reduce this likelihood, ensuring business continuity even if the hardware fails.

Starting with Risk Identification is Crucial

The above outlined steps may help SMEs gain a better understanding of how to identify information security risks. For SMEs that aim to strengthen their cyber security posture, the first step is identifying risks. There is no single “right” way to assess risk, and SMEs can adapt their approach based on processes, assets, contexts or departments.

The goal is to establish a process that leads to clear and consistent identification of risks. This will allow your SME to develop strategies that effectively reduce both the likelihood and impact of these risks.