Compliance Assessment Versus Risk Management: Choosing the Right Method

Standards and regulations relating to safety and quality have received greater scrutiny than ever in a world that has had to establish a new routine. This new reality is impacting the usual practices in various businesses.

Misconceptions abound around risk and compliance assessment. Organizations erroneously assume you’re also equipped to deal with risks if you’re compliant. On the flip side, if your business already has a risk management program, there is an equally false notion that your firm is compliant by default.

Since common misconceptions about compliance and risk may result in unanticipated problems for businesses in all spheres of the economy, it is critical to comprehend these distinctions.

What Is Compliance?

Corporate compliance refers to a company’s strategy to ensure its personnel and outside partners abide by applicable rules, laws, and other contractual responsibilities.

What Is Risk?

The program a business develops to assist in risk identification, and avoidance is known as risk management.

You can see that risk management goes beyond business compliance.

What’s The Difference Between Compliance And Risk Management?

Their end objectives are where compliance and risk management most obviously diverge. To ensure that all regulations are obeyed, compliance is the ultimate aim. Risk management aims to provide a firm with enough capital or insurance coverage to handle risks.

The capacity to respond to risk distinguishes compliance assessment from risk management. An organization’s goal in ensuring compliance is to ensure that the laws are followed. There’s a considerable probability that a business won’t have protection if it just concentrates on compliance when something unusual occurs.

However, a risk manager’s responsibility is to identify all potential risks a firm could encounter and ensure that each risk has a strategy. In comparison to compliance, risk management takes a far more proactive approach. Compliance and risk management must collaborate to guarantee that all risks are covered.

Why And How You Should Pick The Right Approach

Given the potential of an actual breach and the risk of being punished for breaking laws, many firms have made cybersecurity a top priority of their risk management program, which is usually the purview of the CISO.

Organizations that concentrate on security compliance assessment miss important risk considerations. While a solid defense posture will help reduce many known threats, you may not be ready for many consequences because you lack insight into the shifting threat landscape.

For instance, during the COVID-19 pandemic, many businesses were unprepared. They discovered that their security had been compromised due to their teams transitioning to remote work without the necessary infrastructure or planning.

This left the business vulnerable to fraud and data breach risks. Building a cybersecurity strategy centered on risk appraisal and management rather than compliance is necessary to better prepare for evolving risk situations.

Below are some recommendations to start with:

● Forming A Piloting Board

Create a cross-disciplinary steering group to assist you in communicating your risks to other departments and work together to decide which are the most urgent to resolve.

● Emphasis On Task-Critical Schemes And Data Assets

Use an impact assessment to determine the relevance of each impacted system or asset from a business standpoint while making decisions about which risks to prioritize.

● Create A Phased Approach

Avoid attempting to do everything at once in an attempt to “boil the ocean.” Start by focusing on high-priority projects, then expand your program from there.

● A case for establishing a cyber risk strategy

Share with your stakeholders a well-thought-out plan that includes target spending, quick wins, and best practices for enhancing your company’s cybersecurity posture.

Conclusion

Using Tevora’s monitoring technology, you can combine your efforts to manage a unified compliance assessment and use these insights to make proactive, quick, and informed decisions to improve your organization’s cyber resilience.