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2.8 Risk Ranking


2.8 Risk Ranking

 

  • Risk analysis helps to prioritize the risk responses and the allocation of resources.

  • Risk ranking is process of identifying high risk and ranking them so that they can be given priority for risk treatment.

  • Risk can be ranked either on the basis of impact on monetary value. Risk with high monetary impact should be prioritized for risk treatment. Risk can also be ranked on the basis of qualitative parameter such as high risk, medium risk and low risk. High risk should be prioritized for risk treatment.

  • Ranking each risk based on the probability and impact is critical in determining the risk mitigation strategy.

  • For cost effective security arrangement, level of security should be based on criticality of the assets. i.e. critical asset should get enhanced protection as compared to other assets.

 

OCTAVE

 

  • OCTAVE stands for Operationally Critical Threat Asset and Vulnerability Evaluation.

  • OCTAVE is a technique for risk assessment and ranking through a process driven approach. It involves identification, prioritization and management of information security risk.

  • Following are the three phases of OCTAVE process:
  1. Phase 1: In first phase, vulnerabilities and the threat profile for each critical asset is determined.
  2. Phase 2: In second phase, network level vulnerabilities are determined.
  3. Phase 3: In third phase, security strategy and mitigation plans are developed and implemented.

  

Risk Appetite Bands

 

  • Risk appetite is the willingness of the organization to accept the risk.


  • Risk that falls within the risk appetite is “acceptable.” Risk that is outside of the risk appetite but within the risk tolerance is “unacceptable.” Risk that is outside of the risk tolerance is “really unacceptable.”


  • Prioritizing and addressing risk in accordance with the risk ranking helps to respond the risk in a cost-effective manner.

  

Risk Ownership and Accountability


  • The board of directors of the organization has ultimate accountability to all the stakeholders i.e. shareholders, regulators, customers, vendors and employees. Though board is not responsible for execution of risk management program, they are responsible to oversee and monitor risk management strategies of the organization.


  • Similarly, senior management of the organization are ultimately liable for the acceptance and mitigation of all risk.


  • For better accountability, individual should be made owner for a particular risk rather than a department or a function. Each risk must be linked to an individual who accepts ownership of the risk. In most of the cases, asset owner himself is made a risk owner for that asset or function.


  • When it comes to IT risks, it is the responsibility of the business users of IT services to own the - risk related to the use of IT.

Key aspects from CRISC exam perspective


CRISC Question

Possible Answer

Most important step in risk mitigation strategy 

Risk ranking (priority to   be given to mitigate top risks)

How to ensure best and optimal return on security investment?

To arrange security as per asset classification (for example, stringent security arrangement for critical assets and minimum or low security for non-critical assets. This will help to ensure best security at low cost)

What is the goal of IT risk analysis?

To prioritize the risk response 

Resource allocation for providing risk response (risk treatment) is based on

Risk Analysis  (priority to   be given to mitigate top risks)

Best method to respond to risk in a cost-effective manner

Prioritization of the risk  (priority to   be given to mitigate top risks)

Accountability for risk ultimately belongs to the

Board of Directors /Sr. Management 

 

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