Risk management is by some viewed as a costly, time-consuming expense. However, managing risks can save money and boost your organization’s bottom line in the long run. In this blog post, we explore six ways risk management delivers unexpected returns on investment.
Improved decision-making
Risk management enhances decision-making and helps allocate resources effectively. By prioritizing risks, your organization ensures that they invest in the most critical security measures, preventing incidents. This approach avoids spending money on expensive solutions for small and/or insignificant risks.
Crisis avoidance
According to IBM, The global average cost of a data breach in 2024 is 30 million DKK. Furthermore, CyberAngel reports that the average recovery cost from a ransomware attack is 12 million DKK, excluding the ransom itself. By establishing a risk management framework and identifying the biggest risk, your organization can save money on the re-establishment of your infrastructure and a potential public relation crisis.
Regulatory compliance savings
Risk management is not just smart, it is a legal requirement in both GDPR and NIS2. A risk register documents your decisions and rationale behind chosen mitigations. Should your organization face regulatory inspection by a supervisory authority, a well-documented risk register can mean the difference between receiving praise or a penalty.
Insurance covering
Did you know your insurance coverage could be at risk if you do not have adequate cybersecurity measures in place? Insurance companies increasingly require businesses to meet specific security measures to cover a business in case of an incident. Failure to do so may result in denied or delayed insurance claims. A risk management framework can help demonstrate compliance and ensure that your organisation meets the security standards and best practices needed for coverage.
Improved efficiency and customer satisfaction
A well-defined risk management framework includes incident response procedures tailored to specific risks. With these procedures, organizations can react quickly and efficiently, minimizing damage and downtime. By having a plan in place, your organization can avoid the chaos and confusion that are often associated with unexpected security events. Professional, effective incident handling contributes to customer satisfaction, which, over time, positively reflects on your bottom line.
Reputation and brand protection
Risk management is essential to safeguarding your organization’s brand and reputation. Incidents can lead to reduced customer trust, falling stock prices or potential legal complications. Companies working with protecting confidentiality, integrity of information or ensuring availability of services, are particularly vulnerable to such devastating incidents. Implementing an effective risk management framework, resilient security measures, clear procedures and a well-prepared crisis management plan helps minimize these risks and preserve your organization’s credibility.
In conclusion, risk management is an essential tool to build a more resiliant, secure and profitable organization. By focussing on the most significant risks, you improve decision-making, efficiency and trust.
Our advice? Start today.
If you are unsure where to start, we recommend that you check out this blog post or get in touch with us here.
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