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Insider risk management

What Is Insider Risk: Definition Guide

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Insider risk is a critical aspect to consider when creating or updating your cybersecurity strategy. Insider risks are harder to address than external ones, take longer to contain, and are costlier to remediate. In 2023, the total average annual cost of an insider-related incident reached a new maximum and increased to $16.2 million per organization according to the 2023 Cost of Insider Risks Global Report by Ponemon Institute. 

Understanding and defining insider risk is essential for protecting your sensitive information and ensuring a strong cybersecurity posture. This post reveals what insider risk is, the dangers different types of insider risks pose, and how to manage them.

What are insider risks?

Let’s start with the definition of insider risk. 

According to the insider risk definition by NPSA, it’s “a likelihood of harm or loss to an organization, and its subsequent impact, because of the action or inaction of an insider.”

These risks may arise when your employees, partners, or vendors misuse your organization’s assets. 

Compared to external ones, insider risks are harder to detect and mitigate as insiders already have access to your organization’s systems, data, and infrastructure. This access can be exploited to cause significant harm through theft of sensitive information, sabotage, or negligence, resulting in security breaches. 

The most common types of individuals that may cause harm to your organization from the inside include malicious, careless, and compromised insiders.

Three-type classification of insider risks

Examples of insider risk

Insider risk may take various forms, from unintentional policy violations and reacting to phishing emails to espionage, sabotage, or data theft. Here are some real-life scenarios illustrating various types of insider risk:

Data theft by a disgruntled employee

Say an employee feels undervalued and decides to leave your organization for a competitor. Before leaving, they download your corporate data and customer database to a personal USB device or transfer this data to a personal cloud storage account. A malicious employee then uses this data to gain an advantage in their new job. Attacks initiated by malicious insiders are the costliest, at an average of $4.9 million per data breach, according to the 2023 Cost of a Data Breach Report by IBM.

Accidental data leak via a misdirected email

In this scenario, a user might accidentally send an email containing sensitive client information to the wrong recipient outside your company. This unintentional action can expose your private data, leading to regulatory fines and reputational damage. The 2023 Cost of Insider Risks Global Report by Ponemon Institute reveals that negligent and outsmarted insiders cause 55% of all insider-related incidents. While their actions are not malicious, the impact can be just as damaging.

Credential compromise due to a phishing attack 

In a phishing attack, one of your employees or subcontractors clicks on an unverified link, opens a website visually similar to the ones they always work with, and ends up providing their corporate credentials to cybercriminals. The attackers then use these credentials to access your company’s internal systems, steal data, and install malware. 

Incidents involving compromised insiders take a longer time to detect as they combine the challenge of external threats with the difficulty of identifying insider misuse. On average, organizations need 328 days to identify and contain data breaches resulting from stolen or compromised credentials according to the 2023 Cost of a Data Breach Report by IBM.

Whether through malice or negligence, the security risks posed by your employees and third parties must be addressed as their consequences can be very harmful. 

Why are insider risks so dangerous?

Insider risks are particularly dangerous because they strike at the heart of an organization and can lead to severe consequences:

Potential consequences of insider risks

Financial losses

Malicious insider activities such as fraud or data theft can result in significant financial losses. The financial impacts often include direct theft, mitigation costs, regulatory fines, and long-term financial instability.

The loss of intellectual property

If insiders steal or leak your proprietary information, trade secrets, or sensitive research data, this may minimize your organization’s competitive edge and result in a loss of revenue accordingly.

Reputational losses

Insider-related cybersecurity incidents can damage your organization’s public image and erode the trust among your customers, stakeholders, and partners. This can lead to fewer business opportunities and long-term damage to your brand.

Operational disruption

Insiders can sabotage your systems, delete critical data, or disrupt workflows, causing interruptions that affect productivity and business continuity. These disruptions may have cascading effects, leading to workflow delays, reduced efficiency, and increased operational costs.

How to manage insider risks

Addressing insider risks requires a comprehensive strategy that includes the following steps:

Insider risk management key steps

1

Develop a dedicated insider risk management program

2

Implement robust access controls

3

Use monitoring tools

4

Follow data protection practices

5

Conduct regular awareness training

6

Run security audits

7

Establish an incident response plan

8

Constantly assess and update your cybersecurity measures

  1. Develop a dedicated insider risk management program. Establish clear information security policies and procedures for identifying, monitoring, and responding to insider risks. Ensure that all employees, vendors, and partners are aware of the established policies and understand their importance.
  2. Implement robust access controls. Limit access to sensitive information based on the zero trust approach or the principle of least privilege. Ensure that employees have access only to the information necessary for their roles and regularly review and update access permissions. Leverage multi-factor authentication to verify user identities.
  3. Use monitoring tools. Implement cybersecurity tools that provide continuous user activity monitoring and detailed logs. 
  4. Follow data protection practices. Encrypt and regularly back up your sensitive data. Implement Data Loss Prevention (DLP) solutions to monitor and control the transfer of sensitive information.
  5. Conduct regular awareness training. Educate employees about the dangers of insider-related incidents and the importance of following your established cybersecurity protocols.
  6. Run security audits. Conduct periodic security audits to identify vulnerabilities in your systems and ensure compliance with regulatory requirements and internal policies. Security audits can help uncover potential insider risks and guide the implementation of corrective actions.
  7. Establish an incident response plan. Develop and maintain a comprehensive incident response plan that covers procedures for identifying and containing insider-related incidents.
  8. Constantly assess and update your cybersecurity measures. Continuously evaluate your cybersecurity posture, perform risk assessments, and update your insider risk management strategies to keep pace with the evolving threat landscape.

Organizations can build a resilient defense against the dangers posed by insider risks through a combination of policies, employee engagement, and effective cybersecurity software. 

Ekran System is a comprehensive insider risk management platform that can help you maintain a robust security posture by detecting, deterring, and disrupting insider risks. With advanced user activity monitoring, real-time alerting, and incident response capabilities, Ekran System can help you identify and mitigate insider risks before they escalate.

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