Build Resilience with a Risk Management Framework

The Risk Management Framework (RMF) is a guideline used by companies to identify, eliminate, and minimize risks. It was created by the National Institute of Standards and Technology (NIST) to protect the information systems of the U.S. government. Initially designed for federal agencies, the RMF is regularly adopted by organizations in the private sector.

The simple fact is companies can’t operate without exposure to risks such as digital breaches, litigation, and capital loss – to name a few. It’s impossible to eliminate risk, but a comprehensive RMF goes a long way to minimize risk and prepare your company for the challenges that will undoubtedly arise.

What are the components of an RMF?

 As you begin to develop an RMF, it can be useful to break the risk management requirements into categories. These five classifications provide a way of working toward an effective RMF, from identifying the most critical risks to how you will mitigate them.

1. Risk Identification

The first task in developing an RMF is to perform risk identification. According to NIST, “the typical risk factors include threat, vulnerability, impact, likelihood, and predisposing condition.” Brainstorm all the possible risks you can imagine across all of your systems and prioritize them using these factors:

• Threats: circumstances or events that could potentially harm organizational operations, assets, individuals, or other organizations by intrusion, destruction, or disclosure.
• Vulnerabilities: a bug, flaw, weakness, or exposure of an application, system, device, or service that could lead to loss of confidence, integrity, or availability.
• Impact: measure how severe the harm to your organization would be for each risk.
• Likelihood: assess the risk based on probability.
• Predisposing Conditions: delineate factors in your organization that increase or decrease the likelihood of threat events.

2. Risk Measurement and Assessment

Rank and calculate the impact of each risk.

3. Risk Mitigation

 Using your ranked list, determine how to mitigate the risks from the greatest to the least. Threats below a certain level may not be worth addressing, either because there’s little likelihood of it being exploited or there are greater threats to manage.

4. Risk Reporting and Monitoring

Maintain a list of known risks and monitor them regularly.

5. Risk Governance

Finally, all of the steps above should be codified into a risk governance system. Risk governance is the process that ensures company employees perform their duties in accordance with the RMF.

Risk governance also includes defining roles and assigning authority to individuals, committees, and the board for approval of core risks, risk limits, exceptions to limits, risk reports, and general oversight.

Seven Steps to Developing Your Risk Management Framework

The RMF provides a comprehensive, flexible, repeatable, and measurable process that any organization can use to manage information security and privacy risk for organizations and systems. According to NIST, there are seven steps that make up an RMF.

1. Prepare

Focus on getting your organization ready to adopt a formalized risk management strategy. Within RegScale, this step is performed using the following features:

• Stakeholders System: identify and define key management roles
• Users: establish user accounts and assign roles in the system based on each person’s responsibilities
• Role-Based Access Control: limit access on a per-record basis to enforce need-to-know
• Policy Module: define organizational risk strategy and tolerances along with continuous monitoring strategy
• Risk Register Module: conduct an organization-wide risk assessment
• Catalogs/Security Controls Modules: load the applicable set of controls for your organization

2. Categorize

Categorize your information and systems so you can provide an accurate risk assessment of those systems. This entails prioritizing risks and assessing their impact.

3. Select

Choose security controls that will minimize or mitigate identified risks. These controls will vary from one system to the next, and may include anything from adopting monitoring solutions to shaping policies to purchasing insurance to obtaining security software.

4. Implement

Put the controls you selected in the previous step in place and document all the processes and procedures you need to maintain their operation. For RegScale, this step also includes determining how you will ensure controls are met for continuous monitoring.

5. Assess

Make sure the security controls you implemented are working the way they need to so you can limit the risks to your operation and data. And, consider grouping multiple control tests together to track overall progress in auditing the controls for continuous monitoring.

6. Authorize

Ensure risk mitigation strategies are working and that those strategies adhere to any applicable laws and policies.

7. Monitor

Continuously monitor control implementation and risks to the system. RegScale can help you review continuous monitoring results with real-time dashboards or leverage our Application Programming Interfaces (API) to integrate external business intelligence reporting such as Microsoft PowerBI or Salesforce Tableau. And, we help you define steps to review and approve ongoing system authorization based on those results.

Bridging Risk Management and Compliance for a Better RMF

There are a lot of misconceptions about risk and compliance. The assumption is that if you’re compliant, you’re automatically able to mitigate risks. On the flip side, the assumption is that if you’re RMF is in place, your organization is compliant.

The Information Systems Audit and Control Association (ISACA) defines risk as “the probability of an event and its consequence,” whereas compliance is conforming with requirements set forth by a regulatory body. Simply put, risk drives strategic decisions whereas compliance is a tactical decision.

The risk approach is predictive, and compliance is prescriptive. A company’s approach to risk is typically proactive, whereas compliance requirements take on a reactive approach.

While risk and compliance may be viewed differently, companies should understand the downfalls of isolating the programs from each other. Risk departments need to understand the consequence and risks of non-compliance. Compliance departments need to understand the risk appetite the organization is willing to take, to meet its strategic goals.

Bring them together and build a stellar RMF.

Bringing It All Together

The RegScale platform is built to provide Continuous Compliance Automation for the RMF to deliver a Continuous Authorization to Operate (cATO). By providing flexible modules and features for all steps, Application Programing Interfaces (API) for real-time monitoring and integration, and real-time dashboards for reporting and analytics, we equip you with the most comprehensive and affordable solution on the market for your RMF automation needs.

Our team is ready to partner with you. Let’s get started.