📘 What is Risk Analysis?
Risk Analysis is the process of identifying, assessing, and prioritizing potential risks to an organization’s information systems. It helps determine what could go wrong, how likely it is, how much damage it could cause, and what can be done to reduce or prevent it.
It is a part of the risk management process, and it’s crucial for planning effective security measures.
🎯 Objectives of Risk Analysis
- Identify possible threats and vulnerabilities
- Estimate potential loss or damage
- Help decide which risks need immediate action
- Choose cost-effective security controls
- Ensure business continuity
🧱 Key Terms in Risk Analysis
| Term | Explanation |
|---|---|
| Asset | Anything valuable (data, systems, hardware) |
| Threat | Any event or action that can cause harm (e.g., hackers, viruses) |
| Vulnerability | A weakness in the system that threats can exploit |
| Risk | The possibility of a threat exploiting a vulnerability, causing harm |
| Impact | The damage or loss caused by a security incident |
| Likelihood | The probability of the threat occurring |
🧪 Steps of Risk Analysis
Let’s break it down step-by-step:
🔹 Step 1: Identify Assets
List all information assets in your system.
Examples:
- Student database
- Email server
- Faculty login credentials
- Exam papers stored in a system
🔹 Step 2: Identify Threats
List all potential threats that could harm those assets.
Examples:
- Malware attacks
- Unauthorized access
- Hardware failure
- Natural disasters (fire, flood)
🔹 Step 3: Identify Vulnerabilities
Find weak points in your system where threats could enter.
Examples:
- Outdated antivirus
- Weak passwords
- No data backup
- Open USB ports on public computers
🔹 Step 4: Assess Risk (Likelihood × Impact)
You can use qualitative or quantitative methods:
✅ Qualitative Risk Analysis:
- Uses ratings like High, Medium, or Low.
- Based on expert judgment.
✅ Quantitative Risk Analysis:
- Uses actual numbers and formulas to calculate risk.
- E.g., Risk = Probability × Impact (in terms of money)
🔹 Step 5: Prioritize Risks
Not all risks are equal. Focus on high-likelihood and high-impact risks first.
Example Risk Matrix:
| Low Impact | Medium Impact | High Impact | |
|---|---|---|---|
| Low Likelihood | Low Risk | Low Risk | Medium Risk |
| Medium Likelihood | Low Risk | Medium Risk | High Risk |
| High Likelihood | Medium Risk | High Risk | Critical Risk |
🔹 Step 6: Recommend Security Controls
Now decide on actions to reduce or prevent the risks.
Examples:
- Install firewalls and antivirus
- Use strong password policies
- Conduct regular backups
- Implement role-based access control (RBAC)
- Train employees on security awareness
🔐 Real-Life Example: Risk Analysis for a College Admin System
| Asset | Threat | Vulnerability | Risk | Suggested Control |
|---|---|---|---|---|
| Student database | Data breach | Weak passwords | High | Enforce strong password policies |
| Exam files | Unauthorized access | Shared admin login | High | Use individual logins with 2FA |
| PCs in lab | Malware | No antivirus | Medium | Install antivirus and auto-scan |
| Server | Power outage | No UPS | Medium | Install UPS and auto-backup |
📊 Tools Used in Risk Analysis
- NIST Risk Assessment Framework
- OCTAVE (Operationally Critical Threat, Asset, and Vulnerability Evaluation)
- ISO/IEC 27005 standard for risk management
- FAIR (Factor Analysis of Information Risk)
📌 Summary for Exams
| Point | Summary |
|---|---|
| Definition | Risk Analysis identifies and evaluates risks to information systems |
| Goal | Protect assets by assessing threats and vulnerabilities |
| Steps | Identify assets, threats, vulnerabilities → assess risk → prioritize → control |
| Output | Risk level and security measures to reduce the risks |
| Importance | Helps prevent attacks and reduce damage, ensures business continuity |