Introduction to Cloud Risk Management for Enterprises

Every business needs to manage risks. If not, they won’t be around for long. The same is true in cloud computing. As more companies move their resources to the cloud, they must ensure efficient risk management to achieve resilience, availability, and integrity.

Yes, moving to the cloud offers more advantages than on-premise environments. But, enterprises must remain meticulous because they have too much to lose. 

For example, they must protect sensitive customer data and business resources and meet cloud security compliance requirements.

The key to these – and more – lies in cloud risk management. That’s why in this guide, we’ll cover everything you need to know about managing enterprise risk in cloud computing, the challenges you should expect, and the best ways to navigate it.

If you stick around, we’ll also discuss the skills cloud architects need for risk management.

What is Cloud Risk Management and Why is it Important?

In cloud computing, risk management refers to the process of identifying, assessing, prioritizing, and mitigating the risks associated with cloud computing environments. 

It’s a process of being proactive rather than reactive. You want to identify and prevent an unexpected or dangerous event that can damage your systems before it happens.

Most people will be familiar with Enterprise Risk Management (ERM). Organizations use ERM to prepare for and minimize risks to their finances, operations, and goals. 

The same concept applies to cloud computing. 

Cyber threats have grown so much in recent years that your organization is almost always a target. For example, a recent report revealed 80 percent of organizations experienced a cloud security incident in the past year. 

While cloud-based information systems have many security advantages, they may still be exposed to threats. Unfortunately, these threats are often catastrophic to your business operations. 

This is why risk management in cloud environments is critical.

Through effective cloud risk management strategies, you can reduce the likelihood or impact of risks arising from cloud services.

Types of Risks

Managing risks is a shared responsibility between the cloud provider and the customer – you. While the provider ensures secure infrastructure, you need to secure your data and applications within that infrastructure.

Some types of risks organizations face in cloud environments are:

• Data breaches are caused by unauthorized access to sensitive data and information stored in the cloud.

• Service disruptions caused by redundant servers can affect the availability of services to users.

• Non-compliance to regulatory requirements like CIS compliance, HIPAA, and GDPR.

• Insider threats like malicious insiders, cloud misconfigurations, and negligence.

• External threats like account hijacking and insecure APIs.
  

But risk assessment and management aren’t always straightforward. You will face certain challenges – and we’ll discuss them below:

Challenges Facing Enterprise Cloud Risk Management

Most organizations often face difficulties when managing cloud or third-party/vendor risks. These risks are particularly associated with the challenges that cloud deployments and usage cause. 

Understanding the cloud security challenges sheds more light on your organization’s potential risks.

The Complexity of Cloud Environments

Cloud security is complex, particularly for enterprises. For example, many organisations leverage multi-cloud providers.

They may also have hybrid environments by combining on-premise systems and private clouds with multiple public cloud providers. 

You’ll admit this poses more complexities, especially when managing configurations, security controls, and integrations across different platforms.

Unfortunately, this means organizations leveraging the cloud will likely become dependent on cloud services. 

So, what happens when these services become unavailable?

Your organisation may be unable to operate, or your customers can’t access your services.

Thus, there’s a need to manage this continuity and lock-in risks.

Lack of Visibility and Control

Cloud consumers have limited visibility and control. First, moving resources to the public cloud means you’ll lose many controls you had on-premises. 

Cloud service providers don’t grant access to shared infrastructure. Plus, your traditional monitoring infrastructure may not work in the cloud.

So, you can no longer deploy network taps or intrusion prevention systems (IPS) to monitor and filter traffic in real-time. And if you cannot directly access the data packets moving within the cloud or the information contained within them, you lack visibility or control.

Lastly, cloud service providers may provide logs of cloud workloads. But this is far from the real deal. Alerts are never really enough. They’re not enough for investigations, identifying the root cause of an issue, and remediating it. 

Investigating, in this case, requires access to data packets, and cloud providers don’t give you that level of data.

Compliance and Regulatory Requirements

It can be quite challenging to comply with regulatory requirements. For instance, there are blind spots when traffic moves between public clouds or between public clouds and on-premises infrastructures. 

You can’t monitor and respond to threats like man-in-the-middle attacks. This means if you don’t always know where your data is, you risk violating compliance regulations.  

With laws like GDPR, CCPA, and other privacy regulations, managing cloud data security and privacy risks has never been more critical.

Understanding Existing Systems and Processes

Part of cloud risk management is understanding your existing systems and processes and how they work. 

Understanding the requirements is essential for any service migration, whether it is to the cloud or not. This must be taken into consideration when evaluating the risk of cloud services. How can you evaluate a cloud service for requirements you don’t know?

Evolving Risks

Organizations struggle to have efficient cloud risk management during deployment and usage because of evolving risks. 

Organizations often develop extensive risk assessment questionnaires based on audit checklists, only to discover that the results are virtually impossible to assess. 

While checklists might be useful in your risk assessment process, you shouldn’t rely on them.

Pillars of Effective Cloud Risk Management – Actionable Processes

Here’s how efficient risk management in cloud environments looks like:

Risk Assessment and Analysis

The first stage of every risk management – whether in cloud computing or financial settings – is identifying the potential risks. 

You want to answer questions like, what types of risks do we face? For example, are they data breaches? Unauthorized access to sensitive data? Or are they service disruptions in the cloud?

The next step is analysis. Here, you evaluate the likelihood of the risk happening and the impact it can have on your organization. This lets you prioritize risks and know which ones have the most impact. 

For instance, what consequences will a data breach have on the confidentiality and integrity of the information stored in the cloud? 

Security Controls and Safeguards to Mitigate Risks

Once risks are identified, it’s time to implement the right risk mitigation strategies and controls. 

The cloud provider will typically offer security controls you can select or configure. However, you can consider alternative or additional security measures that meet your specific needs.

Some security controls and mitigation strategies that you can implement include:

• Encrypting data at rest and in transit to protect it from unauthorized access. For example, you could encrypt algorithms and implement secure key management practices that protect the information in the cloud while it’s being transmitted.

• Implementing accessing control and authentication measures like multi-factor authentication (MFA), role-based access control (RBAC), and privileged access management (PAM). These mechanisms ensure that only authorized users can access resources and data stored in the cloud.

• Network security and segmentation: Measures like firewalls, intrusion detection/intrusion prevention systems (IDS/IPS), and virtual private networks (VPN) will help secure network communications and detect/prevent malicious actors. On the other hand, network segmentation mechanisms help you set strict rules on the services permitted between accessible zones or isolated segments.
  

Regulatory Compliance and Data Governance

Due to the frequency and complexity of cyber threats, authorities in various industries are releasing and updating recommendations for cloud computing. These requirements outline best practices that companies must adhere to avoid and respond to cyber-attacks.

This makes regulatory compliance an essential part of identifying and mitigating risks.

It’s important to first understand the relevant regulations, such as PCI DSS, ISO 27001, GDPR, CCPA, and HIPAA. Then, understand each one’s requirements. For example, what are your obligations for security controls, breach notifications, and data privacy? 

Part of ensuring regulatory compliance in your cloud risk management effort is assessing the cloud provider’s capabilities. 

Do they meet the industry compliance requirements? What are their previous security records? Have you assessed their compliance documentation, audit reports, and data protection practices?

Lastly, it’s important to implement data governance policies that prescribe how data is stored, handled, classified, accessed, and protected in the cloud.

Continuous Monitoring and Threat Intelligence

Cloud risks are constantly evolving. This could be due to technological advancements, revised compliance regulations and frameworks, new cyber-treats, insider threats like misconfigurations, and expanding cloud service models like Infrastructure-as-a-Service (IaaS). 

What does this mean for cloud computing customers like you?

There’s an urgent need to conduct regular security monitoring and threat intelligence to address emerging risks proactively. 

It has to be an ongoing process of performing vulnerability scans of your cloud infrastructure. This includes log management, periodic security assessments, patch management, user activity monitoring, and regular penetration testing exercises. 

Incident Response and Business Continuity

Ultimately, there’s still a chance your organization will face cyber incidents. Part of cloud risk management is implementing cyber incident response plans (CIRP) that help contain threats. 

Whether these incidents are low-level risks that were not prioritized or high-impact risks you missed, an incident response plan will ensure business continuity.

It’s also important to gather evidence through digital forensics and analyze system artifacts after incidents.

Backup and Recovery

Implementing data backup and disaster recovery into your risk management ensures you minimize the impact of data loss or service disruptions. For example, backing up data and systems regularly is important. 

Some cloud services may offer redundant storage and versioning features, which can be valuable when your data is corrupted or accidentally deleted. 

Additionally, it’s necessary to document backup and recovery procedures to ensure consistency and guide architects.

Best Practices for Effective Cloud Risk Management

Achieving cloud risk management involves combining the risk management processes above, setting internal controls, and corporate governance. Here are some best practices for effective cloud risk management:

1. Careful Selection of Your Cloud Service Provider (CSP)

Carefully select a reliable cloud service provider (CSP). You can do this by evaluating factors like contract clarity, ethics, legal liability, viability, security, compliance, availability, and business resilience. Note that it’s important to assess if the CSP relies on other service providers and adjust accordingly.

2. Establishing a Cloud Risk Management Framework

Consider implementing cloud risk management frameworks for a structured approach to identifying, assessing, and mitigating risks. Some notable frameworks include: 

• National Institute of Standards and Technology (NIST) Cloud Computing Risk Management Framework (CC RMF)

• ISO/IEC 27017

• Cloud Security Alliance (CSA) Cloud Controls Matrix (CCM)

• Cloud Audit and Compliance (CAC) Criteria

• Center for Internet Security (CIS) Controls for Cloud, etc.

3. Collaboration and Communication with Stakeholders

You should always inform all stakeholders about potential risks, their impact, and incident response plans. A collaborative effort can improve risk assessment and awareness, help your organization leverage collective expertise, and facilitates effective decision-making against identified risks.

4. Implement Technical Safeguards

Deploying technical safeguards like cloud access security broker (CASB) in cloud environments can enhance security and protect against risks. CASB can be implemented in the cloud or on-premise and enforces security policies for users accessing cloud-based resources. 

5. Set Controls Based on Risk Treatment

After identifying risks and determining your risk appetite, it’s important to implement dedicated measures to mitigate them. Develop robust data classification and lifecycle mechanisms and integrate processes that outline data protection, erasure, and hosting into your service-level agreements (SLA).

6. Employee Training and Awareness Programs

What’s cloud risk management without training personnel? At the crux of risk management is identifying potential threats and taking steps to prevent them. Insider threats and the human factor contribute significantly to threats today. 

So, training employees on what to do to prevent risks during and after incidents can make a difference. 

7. Adopt an Optimized Cloud Service Model

Choose a cloud service model that suits your business, minimizes risks, and optimizes your cloud investment cost. 

8. Continuous Improvement and Adaptation to Emerging Threats

As a rule of thumb, you should always look to stay ahead of the curve. Conduct regular security assessments and audits to improve cloud security posture and adapt to emerging threats.

Skills Needed for Cloud Architects in Risk Management

Implementing effective cloud risk management requires having skilled architects on board. 

Through their in-depth understanding of cloud platforms, services, and technologies, these professionals can help organizations navigate complex cloud environments and design appropriate risk mitigation strategies.

• Cloud Security Expertise: This involves an understanding of cloud-specific security challenges and a solid knowledge of the cloud provider’s security capabilities.

• Risk Assessment and Management Skills: Cloud architects must be proficient in risk assessment processes, methodologies, and frameworks. It is also essential to prioritize risks based on their perceived impact and implement appropriate controls.

• Compliance and Regulatory Knowledge: Not complying with regulatory requirements may cause similar damage as poor risk management. Due to significant legal fees or fines, cloud architects must understand relevant industry regulations and compliance standards. They must also incorporate these requirements into the company’s risk management strategies.

• Incident Response and Incident Handling: Risk management aims to reduce the likelihood of incidents or their impact. It doesn’t mean completely eradicating incidents. So, when these incidents eventually happen, you want cloud security architects who can respond adequately and implement best practices in cloud environments.
  

Conclusion

The importance of prioritizing risk management in cloud environments cannot be overstated. It allows you to proactively identify risks, assess, prioritize, and mitigate them. This enhances the reliability and resilience of your cloud systems, promotes business continuity, optimizes resource utilization, and helps you manage compliance.

Do you want to automate your cloud risk assessment and management? Prevasio is the ideal option for identifying risks and achieving security compliance. Request a demo now to see how Prevasio’s agentless platform can protect your valuable assets and streamline your multi-cloud environments.