ISO 27001 risk assessment

What is information security risk management? 

Risk management is one of the most challenging aspects of ISO 27001 implementation. At the same time, it's also the most important step, as it lays the groundwork for effective information security in your organization. 

Risk management means identifying, analyzing, and responding to threats to your assets’ confidentiality, integrity, and availability. The objective is to address risks according to your organization's overall risk tolerance. Rather than aiming to eliminate all risks, the goal is to determine and maintain an acceptable risk threshold.

Information security risk assessment and its importance 

A risk assessment identifies security gaps and vulnerabilities. Afterwards, you can apply appropriate security measures to mitigate them. The complexity depends on various factors, including your organization's size, growth rate, resources, and asset portfolio. 

The risk assessment results form the basis of an Information Security Management System (ISMS), allowing management to make more informed decisions regarding resource allocation, tools, and implementation of security measures.  

Once you've done a risk assessment, you need to decide how to manage risks based on allocated resources and budget. This involves weighing all information security risks, their likelihood of occurrence, and their potential impact.

How does continuously reviewing and monitoring your ISMS help you prepare for a risk assessment? 

ISO 27001 requires the ISMS to be regularly reviewed, updated, and improved to ensure it works appropriately and adapts to a changing environment. An internal audit is one way to validate your ISMS. 

Many frameworks change to reflect emerging threats, making it essential to have a security tool that allows for easy updates to your risk assessment process. 

What does ISO 27001 require when conducting a risk assessment?

According to ISO 27001 (section 6.1.2), your risk assessment methodology must be documented. You need a clear plan and instructions to set up your organization for success. As a starting point, here is what section 6.1.2 requires: 

• Define how to spot the threats that might compromise your data's confidentiality, integrity, and availability 

• Establish a method for identifying the risk owners 

• Define the criteria for evaluating repercussions and determining the risk's likelihood 

• Define a method for calculating risk 

• Define your risk-acceptance criteria 

In short, you need to identify these five aspects to achieve ISO 27001 compliance. Use this as a foundation for your plan. 

ISO 27001's approach to treating risks 

A risk treatment plan (RTP) is another essential aspect of the ISO 27001 implementation process that outlines how your organization responds to recognized threats. You can mitigate or even completely remove risks by using the following treatment options: 

• Implementing a security control to reduce the likelihood of the risk materializing 

• Avoiding the risk by stopping any activity that may increase its likelihood 

• Obtaining cyber insurance and transferring the risk to a third party 

• Retaining the risk by accepting it if the cost of potential damage will be less than the cost of preventing it 

The seven steps to an effective ISO 27001 risk assessment

A risk assessment process that meets the requirements of ISO 27001 should have these steps:

1. Establish an ISO 27001 risk assessment framework

It’s important for your organization to handle risk assessment consistently. Therefore, you need to develop guidelines that outline the process for all business functions. 

You should define across the organization what level of risk is acceptable, and whether you want to carry out a qualitative or quantitative risk assessment. A qualitative approach evaluates risks based on professional judgement and descriptive factors, while a quantitative approach uses numerical data and statistical models to measure risk levels and probabilities. 

Several aspects must be addressed in a formal risk assessment methodology: 

• The most important security criteria for your organization 

• The scale of applicable risks 

• The organization's appetite for risk 

2. Create a list of your organization's potential risk scenarios

There are two different approaches to this step. The first method is scenario-based. Here, you focus primarily on scenarios that could pose a real threat, such as a ransomware attack or a distributed denial-of-service (DDoS) attack. 

The second method is asset-based, focusing on risks related to your information assets. With this approach, it typically takes longer to identify risks, because you need a full view of all of the data your organization manages. 

3. Identify risks

Now, you can start identifying which potential problems may affect you. Use our library of risk scenarios on our platform, or add your own.

4. Evaluate risk impact

Some risks are more severe than others, so you need to decide which should be treated as a priority based on your organization's unique circumstances. It’s critical to rank risks according to their likelihood of occurrence and the potential damage they can inflict, so you know which ones to address first.

5. Create a Statement of Applicability

The Statement of Applicability (SoA) illustrates your organization’s security profile. You must identify all the security controls you have implemented, why you have selected them, and how you have configured them based on your risk assessment results. 

This document is crucial since it will be used as the audit's central guideline by the certification auditor to achieve ISO 27001 certification.

6. Create a risk treatment plan

According to ISO 27001, you must identify risk owners for all risks. They are in charge of approving any risk mitigation strategies and accepting the residual risk level. 

Human error introduces numerous risks to an organization, which you can rarely eliminate entirely. As a result, most risks will have to be mitigated, instead of completely addressed. An effective mitigation strategy starts by implementing controls described in ISO 27001 Annex A.

7. Review, monitor, and conduct an internal audit

To guarantee that you have accounted for changes in how your organization functions and the evolving threat environment, you have to repeat your risk assessment process every year. 

Mitigation techniques, responsibilities, budget, and timelines should all be included in the risk assessment strategy. 

You should also take advantage of this chance to improve your ISMS. This might include moving to a new risk treatment option for different threats or adopting a more effective control to handle risks if your previous solutions did not meet expectations.

Learn more about how to run an internal audit in this article.