Data risk management refers to the process through which an organization identifies, assesses, and

mitigates data-related risks. Learn more about data risk management and some of the best data risk
management practices in this blog.

What Is Data Risk Management? Top

Risks & Best Practices
Data risk management is how an organization identifies, assesses, and mitigates data-associated risks.
This includes potential threats related to data privacy, data security, compliance risks, and business
risks associated with improper data handling.

Data risk management aims to maintain data accuracy, integrity, and accessibility while preventing
unauthorized access, ensuring compliance with various regulations, and preventing data breaches that
can lead to financial losses or damage to an organization's reputation.

This process might involve strategies like developing comprehensive data policies, performing regular
risk assessments, implementing data and code security technology, training staff on data handling
practices, and creating a disaster recovery plan.

Why Is Data Risk Management

Important?
A comprehensive data risk management plan ensures regulatory compliance and enhances reputation,
boosts customer confidence, and, ultimately, bolsters the bottom line. That's why data risk management
is a critical component of modern business that should support your overall business strategy
underpinned by secure and reliable data.

Here are some other reasons why data risk management is crucial:

• Data Protection: With much of today's business conducted digitally, protecting sensitive
information from cyber threats, such as data breaches or hacking attempts, is essential.
• Regulatory Compliance: Many industries have specific regulations regarding the handling, storing,
and sharing of data. Proper data risk management can ensure compliance with these laws,
avoiding hefty fines or legal complications.
• Financial Security: Data breaches can result in significant financial losses due to remediation
costs, diminished customer trust, legal fees, and regulatory fines.
• Reputation Management: Breaches can damage a company’s reputation, leading to the loss of
customer trust and business opportunities. By properly managing data risks, companies can
safeguard their reputation.
• Business Continuity: Certain data breaches can disrupt business operations. A robust data risk
management strategy ensures the organization is prepared to counteract and recover from such
disruptions swiftly.
• Competitive Advantage: Demonstrating robust data protection can provide a competitive edge
as customers become increasingly aware of and concerned about their data safety.
• Decision Making: Accurate data and sound management are imperative for strategic decision-
making. If the integrity of an organization's data is compromised, it can lead to faulty decision-
making that can negatively impact the business.
• Privacy Assurance: Data risk management strategies can help ensure the privacy of sensitive
information for both customers and employees.
What Are the Risks of Improper Data
Management?
• Data Breaches: Unauthorized access or malicious attacks to secure data can expose confidential
information, leading to loss of trust and possible legal action taken against the company.
• Data Quality Issues: Incorrect or incomplete data can lead to poor decision-making, operational
inefficiencies, and customer dissatisfaction.
• Data Loss: This could be due to hardware failure, human error, malicious attacks, or natural
disasters, resulting in businesses losing crucial data.
• Security Risks: Poorly managed data can lead to vulnerabilities, making it easier for
cybercriminals to infiltrate your systems.
• Poor Data Integration: Difficulty in merging data residing in different sources or formats can lead
to data silos negatively affecting business intelligence and decision-making.
• Insider Threats: Employees or partners could either intentionally or unintentionally cause a
breach in data.
• Technological Changes: With technology constantly changing, data management must evolve
accordingly to maintain effective storage, analytics, and security.
• Data Privacy: Failure to protect the privacy of customer or employee data can result in breaches
of trust and potential legal issues.
• Reputational Risks: Any of the above risks can damage a company's reputation, leading to loss
of business and decreased customer trust.
• Vendor Risks: If a third-party service provider does not effectively manage data, it can expose
the organization to risk.

What Is the Role of Data Risk

Management?
Data Risk Management plays a crucial role in an organization by protecting it against potential data
breaches. It involves using data discovery methods to identify sensitive data and ensure compliance
with data privacy laws.

Here is a deeper look into its key roles:

• Safeguarding Data: One of the primary roles is to protect the organization's data from various
threats like cyber-attacks, insider threats, data leakage, and accidental deletion. It involves
creating and implementing security protocols and controls.
• Compliance with Regulations: Regulations like GDPR, HIPPA, and CCPA mandate specific data
privacy and protection standards. Data Risk Management ensures that the organization complies
with these regulations to avoid penalties and to maintain trust with customers and partners.
• Risk Identification and Mitigation: This involves identifying potential vulnerabilities and risks in
the organization's data infrastructure. Once these risks are identified, strategies are developed
and implemented to mitigate these risks.
• Business Decision Support: Reliable and secure data is fundamental to informed decision-
making. By ensuring data integrity, Data Risk Management supports business decisions and
strategies.
• Training and Education: An integral role of Data Risk Management is to educate and train staff
regarding best practices for handling data securely to prevent accidental breaches or leaks.
• Disaster Recovery: In case of a data breach or loss, Data Risk Management is responsible for
activating the disaster recovery plan to restore lost data, minimize downtime, and reduce impact
on business operations.
 • Continuous Monitoring: Data risk management involves constantly monitoring an organization's
data systems to detect anomalies and potential threats. This is geared to ensure all protective
measures are functioning correctly.

Data Risk Management Best Practices

Data risk management involves implementing strong security measures, keeping up-to-date with the
latest regulatory changes, and investing in skilled personnel and technology.

Here are some of the data risk management best practices you should include:

• Risk Assessment: Conduct regular data risk assessments to identify potential threats and
vulnerabilities to your data. This includes reviewing IT systems, business processes, personnel,
and physical environments. Risk assessments should ideally cover all areas where your data is
stored, processed, or transmitted, including third-party systems and services.
• Risk Taxonomy: Providing a comprehensive hierarchical categorization of an organization's
common risks.
• Categorize Data: Not all data needs the same level of security. Categorize your data based on
sensitivity and business impact. The more sensitive the data, the higher the level of protection it
should have.
• Implement Strong Access Controls: Limit access to sensitive data to only those who need it to
perform their jobs. Use strong, complex passwords, and enforce multi-factor authentication
wherever possible.
• Regularly Update and Patch Systems: Ensure your systems, applications, and security tools are
regularly updated and patched to close any potential security vulnerabilities. Cyber attackers
often exploit unpatched systems.
• Encrypt Sensitive Data: Consider encrypting sensitive data, both at rest (stored data) and in
transit (data being transferred). Encryption can protect your sensitive information even if a data
breach occurs.
• Educate Employees: Many data breaches result from employee negligence or ignorance. Provide
regular education and training to employees on data security best practices and your
company's data protection policies and procedures.
• Develop Incident Response Plans: Establish clear procedures for responding to a data breach or
other security incident. This should include steps to contain the breach, assess and limit
damage, notify affected individuals and stakeholders, and restore systems.
• Regular Monitoring and Auditing: Implement continuous monitoring of your systems to detect
suspicious activities or anomalies and conduct regular audits of your security controls and data
risk management practices.
• Vendor Management: If you share data with third-party vendors, they must also follow best data
risk management practices. Perform due diligence on their security practices and include data
protection clauses in your contracts.
• Regulatory Compliance: Ensure you understand and comply with all relevant data protection
laws, regulations, and standards that apply to your industry and jurisdiction.
• Data Backups: Regular data backups can help recover in the event of data loss due to breaches,
system failures, or natural disasters. Use multiple backup methods and test them regularly.
• Get Cyber Insurance: Given the rising cyber threats, it may be beneficial to consider cyber
insurance as part of your risk management strategy. It can help mitigate financial losses from
various cyber incidents, including data breaches, business interruption, and network damage.

Learn How Digital Guardian Improves

Your Data Risk Management
Digital Guardian understands that addressing the challenges of data risk management requires a holistic
approach. Our expertise includes fostering a culture of data protection across the organization through
data classification, data loss prevention, and maintaining privileged accounts.

Data Risk Analysis: Identifying

and Managing Risky Data .
Data risk analysis is a crucial practice for organizations to identify and manage
potentially risky data in an increasingly digital world. With the growing prevalence
of remote work, cyber security breaches, and cloud security risks, the cost of
data breaches has soared to unprecedented levels. Organizations must address
the main factors contributing to data risk, such as poor data governance, data
mismanagement, inadequate data security, and bad patch management.

To effectively manage data risks, organizations should implement a range of

strategies, including data classification, access control measures, regular data
risk assessments, encryption, and incident response planning. It is vital to involve
stakeholders from various departments, such as CISOs, CIOs, and cybersecurity
professionals, to ensure comprehensive data risk management.

Artificial intelligence plays a significant role in data risk management by enabling

predictive analytics, fraud detection, cybersecurity, and compliance activities.
This technology enhances organizations’ capabilities in mitigating data risks. The
financial services industry, with its high-risk data targets, should pay extra
attention to data risk management to safeguard sensitive information.

Conducting regular data risk assessments is essential for organizations to

identify security and privacy control shortcomings. By doing so, they can develop
a roadmap to mitigate these risks effectively and protect against potential data
breaches.

The Cost of Data Breaches and Factors Contributing

to Data Risk

The cost of data breaches has reached record highs, with poor data governance,
data mismanagement, inadequate data security, and bad patch management
being major factors contributing to data risk. In today’s digital landscape,
organizations face an ever-increasing threat of cyber security breaches,
especially with the rise in remote work and the growing dependence on cloud
technology. To effectively manage data risks, it is crucial for organizations to
address these factors and implement robust data risk analysis strategies.

Poor data governance plays a significant role in data risk, as it involves the lack
of proper policies, procedures, and controls for managing and protecting data.
Without a well-defined governance framework, organizations struggle to
maintain data integrity and security, making them vulnerable to breaches and
unauthorized access. Similarly, data mismanagement, such as inadequate data
classification and inaccurate data storage practices, leads to a higher risk of
data breaches and compromises.

Inadequate data security measures are another critical factor contributing to

data risk. Organizations that fail to implement strong security controls, such as
access control mechanisms and encryption, expose themselves to potential data
breaches. Moreover, bad patch management, the failure to regularly update and
patch software vulnerabilities, gives cyber attackers an opportunity to exploit
weaknesses in the system, resulting in data breaches and cyber incidents.
 Factors Contributing to Data Risk Impact

Poor data governance Increased vulnerability to breaches and unauthorized access

Data mismanagement Higher risk of data breaches and compromises

Inadequate data security Potential exposure to data breaches

Bad patch management Opportunity for cyber attackers to exploit vulnerabilities

Addressing these factors is crucial for organizations to effectively manage data

risks. Implementing data classification mechanisms and access control
measures helps ensure that data is protected and accessed only by authorized
individuals. Regular data risk assessments enable organizations to identify
potential vulnerabilities and take proactive measures to mitigate risks.
Encryption adds an extra layer of security to sensitive data, making it harder for
cyber attackers to decipher even if they gain unauthorized access. Incident
response planning is essential to minimize the impact of data breaches and
swiftly respond to any security incidents.

As organizations navigate the complex challenges of data risk management, it is

crucial to involve stakeholders from various departments. Chief Information
Security Officers (CISOs), Chief Information Officers (CIOs), and cybersecurity
professionals play a critical role in developing and implementing effective data
risk management strategies. Their expertise and collaboration ensure that
organizations have comprehensive defenses in place to protect their data
assets.

With the advent of artificial intelligence (AI), data risk management has taken a
leap forward. AI-powered technologies enable predictive analytics, facilitating
proactive identification of potential risks and enabling organizations to take
preventive measures. AI also aids in fraud detection, cybersecurity analytics, and
automating compliance activities, enhancing an organization’s ability to address
data risks effectively.
The Role of Artificial Intelligence in Data Risk Management:

• Predictive analytics for proactive risk identification

• Fraud detection to prevent financial losses
• Cybersecurity analytics for threat detection and prevention
• Automating compliance activities to ensure regulatory adherence
While data risk management is crucial across industries, the financial services
sector faces unique challenges. Financial institutions handle high volumes of
sensitive customer data, making them attractive targets for cyber criminals.
Therefore, data risk management in the financial services industry requires extra
attention and robust security measures to safeguard against data breaches and
financial losses.

To ensure continuous improvement and stay ahead of evolving threats,

organizations must conduct regular data risk assessments. These assessments
identify security and privacy control shortcomings, enabling organizations to
develop a roadmap for mitigating identified risks. By actively addressing
vulnerabilities and enhancing security measures, organizations can significantly
reduce the likelihood and impact of data breaches.

In Summary:

– The cost of data breaches has reached record highs

– Poor data governance, data mismanagement, inadequate data security, and
bad patch management contribute to data risk
– Strategies such as data classification, access control measures, regular risk
assessments, encryption, and incident response planning are essential for
effective data risk management
– Stakeholder involvement, including CISOs, CIOs, and cybersecurity
professionals, is crucial for successful data risk management
– Artificial intelligence plays a significant role in data risk management, aiding in
predictive analytics, fraud detection, cybersecurity, and compliance activities
– The financial services industry faces unique data risk challenges and should
prioritize data risk management
– Regular data risk assessments help identify vulnerabilities and develop a
roadmap for mitigating risks

Strategies for Effective Data Risk Management

To effectively manage data risks, organizations should implement strategies
such as data classification, access control measures, regular data risk
assessments, encryption, and incident response planning. These strategies play
a crucial role in mitigating potential data risks and safeguarding sensitive
information.

Data Classification: Assigning labels and tags to data based on its sensitivity
and importance helps organizations prioritize their protection efforts. By
categorizing data into different levels of sensitivity, organizations can ensure that
appropriate security measures are in place for each category.

Access Control Measures: Implementing stringent access controls helps limit

unauthorized access to data. Role-based access control (RBAC), multi-factor
authentication (MFA), and user access reviews are effective measures that can
enforce strict access policies and minimize the risk of data breaches.

Regular Data Risk Assessments: Conducting regular data risk assessments

allows organizations to identify potential vulnerabilities and shortcomings in their
data security practices. By analyzing the current state of data security,
organizations can make informed decisions on areas that require improvement
and allocate resources accordingly.

Encryption and Incident Response Planning

Encryption serves as a critical safeguard against unauthorized access to

sensitive data. By encrypting data at rest and in transit, organizations can ensure
that even if data is compromised, it remains unreadable and unusable.

Incident response planning involves developing a comprehensive plan to address

data breaches and other security incidents promptly. By outlining incident
response procedures, organizations can minimize the impact of data breaches,
reduce downtime, and facilitate a swift recovery process.

Strategies for Effective Data Risk Management Benefits

Data Classification Allows organizations to prioritize protection efforts

 Access Control Measures Minimizes the risk of unauthorized access to data

Regular Data Risk Assessments Identifies vulnerabilities and areas for improvemen

Encryption Safeguards data from unauthorized access

Incident Response Planning Facilitates prompt and efficient response to security

By implementing these strategies and involving stakeholders from various

departments, organizations can strengthen their data risk management efforts
and protect their valuable assets from potential threats. It is crucial to adapt and
evolve these strategies continuously to keep pace with the ever-changing data
security landscape.

Stakeholder Involvement in Data Risk Management

Successful data risk management requires the active involvement of

stakeholders from various departments, including CISOs, CIOs, and cybersecurity
professionals. These individuals play a crucial role in ensuring the effective
identification and management of potentially risky data within an organization.
By actively engaging stakeholders from different areas, organizations can benefit
from diverse perspectives, expertise, and insights that contribute to
comprehensive data risk management strategies.

The Role of CISOs

Chief Information Security Officers (CISOs) are responsible for overseeing the
organization’s overall security posture and ensuring the confidentiality, integrity,
and availability of data. They play a vital role in data risk management by setting
security policies, implementing security controls, and ensuring compliance with
relevant regulations. CISOs also collaborate with other stakeholders to establish
incident response plans, conduct security audits, and address emerging data
security threats.

The Involvement of CIOs

Chief Information Officers (CIOs) are responsible for the organization’s overall
information technology strategy and operations. They work closely with
stakeholders to align data risk management efforts with business goals and
objectives. CIOs provide crucial insights into technological capabilities and
limitations, ensuring that data risk management strategies are practical, scalable,
and aligned with the organization’s broader IT infrastructure. They also
collaborate with CISOs and other stakeholders to develop secure data storage
and transmission practices.

The Expertise of Cybersecurity Professionals

Cybersecurity professionals bring specialized knowledge and skills to the table,

enhancing data risk management capabilities. These experts are well-versed in
identifying vulnerabilities, assessing risks, and implementing effective security
measures. They contribute to data risk management through activities such as
penetration testing, vulnerability assessments, security awareness training, and
incident response planning. Their expertise helps organizations stay ahead of
emerging threats and respond effectively to data breaches and security
incidents.

By actively involving stakeholders such as CISOs, CIOs, and cybersecurity

professionals, organizations can build a strong foundation for data risk
management. These individuals bring their unique perspectives, expertise, and
insights to the table, ensuring a comprehensive and proactive approach to
identifying and managing potentially risky data. Collaboration between
stakeholders from different departments is essential for the successful
implementation of data risk management strategies, enabling organizations to
protect their data assets and maintain a strong security posture in today’s digital
landscape.

Stakeholder Roles and Responsibilities

Oversees overall security posture, sets security policies, implements security controls,
CISOs
compliance, collaborates on incident response planning and security audits

Aligns data risk management with business goals, provides insights into technological
CIOs
oversees data storage and transmission practices
 Cybersecurity Conducts penetration testing, vulnerability assessments, security awareness training, c
Professionals incident response planning

The Role of Artificial Intelligence in Data Risk

Management

Artificial intelligence is playing a significant role in data risk management,

enabling organizations to leverage predictive analytics, enhance fraud detection,
strengthen cybersecurity, and streamline compliance activities. With the ever-
increasing volume and complexity of data, AI provides organizations with the
tools to effectively analyze and manage data risks.

Predictive analytics, powered by AI, allows organizations to proactively identify

potential data risks by analyzing patterns, trends, and anomalies in vast amounts
of data. By leveraging machine learning algorithms, AI can make accurate
predictions about future data risks, helping organizations take proactive
measures to mitigate those risks.

Fraud detection is another critical area where AI is revolutionizing data risk

management. AI-powered algorithms can quickly analyze large datasets to
detect fraudulent activities and transactions. This not only helps organizations in
preventing financial losses but also safeguards their reputation and builds trust
with customers.

Cybersecurity is a major concern for organizations in today’s digital landscape.

AI plays a crucial role in strengthening cybersecurity defenses by continuously
monitoring networks, systems, and user behavior to detect and respond to
potential threats. AI-powered security systems can analyze real-time data,
identify suspicious activities, and take immediate action to mitigate risks,
ensuring robust protection against cyber attacks.

Compliance activities are also made more efficient with the use of AI in data risk
management. AI can automate compliance processes, ensuring adherence to
regulations and standards. This helps organizations streamline their compliance
efforts, reduce manual errors, and improve overall compliance effectiveness.
 Benefits of AI in Data Risk Management Examples

Predictive analytics Identifying potential data risks before they occur

Fraud detection Quickly identifying and preventing fraudulent activities

Cybersecurity Continuous monitoring and immediate response to potenti

Compliance activities Automating compliance processes and improving effective

In conclusion, artificial intelligence is revolutionizing data risk management by

enabling organizations to leverage predictive analytics, enhance fraud detection,
strengthen cybersecurity defenses, and streamline compliance activities. As
technology continues to advance, AI will play an increasingly vital role in helping
organizations identify, manage, and mitigate data risks in today’s rapidly evolving
digital landscape.

Data Risk Management in the Financial Services

Industry

The financial services industry faces high-risk data targets, making robust data
risk management practices imperative for safeguarding sensitive information.
With the constant threat of cyberattacks and the potential for significant financial
loss, financial institutions must prioritize data risk management to protect their
clients and maintain regulatory compliance.

One critical aspect of data risk management in the financial services industry is
implementing appropriate data classification measures. By categorizing data
based on its sensitivity and importance, organizations can allocate resources
effectively and apply the necessary security controls. This classification process
helps identify high-risk data areas that require enhanced protection and enables
organizations to prioritize data risk mitigation efforts.
In addition to data classification, access control measures play a vital role in
data risk management. Restricting access to sensitive data to authorized
personnel minimizes the risk of unauthorized access or data breaches.
Implementing strong authentication protocols, role-based access controls, and
encryption techniques helps ensure that only approved individuals can access
sensitive information.

Key Strategies for Data Risk Management in the Financial Services Industry

1. Data Classification

2. Access Control Measures

3. Regular Data Risk Assessments

4. Incident Response Planning

5. Encryption

6. Stakeholder Involvement

Regular data risk assessments are also crucial in mitigating

potential vulnerabilities. By conducting regular assessments,
financial institutions can identify any security or privacy control
shortcomings and take proactive measures to address them.
This includes identifying areas where patches need to be applied,
ensuring software and systems are up to date, and implementing
rigorous patch management practices.

Furthermore, incident response planning is essential in minimizing the impact of

a data breach or security incident. Having a well-defined plan in place helps
organizations respond swiftly and effectively, reducing the time it takes to detect,
contain, and mitigate the consequences of a breach. Incident response plans
should outline clear roles and responsibilities, establish communication
protocols, and include strategies for recovering data and systems in the event of
an incident.

In conclusion, the financial services industry must prioritize robust data risk
management to protect sensitive information from cyber threats. Through data
classification, access control measures, regular risk assessments, incident
response planning, and encryption, financial institutions can strengthen their
overall security posture and reduce the risk of data breaches. By involving
stakeholders and leveraging artificial intelligence technologies, financial
organizations can stay one step ahead of evolving threats and ensure the
integrity, confidentiality, and availability of their data.

Regular Data Risk Assessments and Mitigation

Roadmap

Conducting regular data risk assessments helps organizations identify security

and privacy control shortcomings and develop a roadmap to mitigate potential
risks. By thoroughly evaluating their data systems and processes, organizations
can proactively identify vulnerabilities and take appropriate measures to
minimize the impact of potential data breaches or security incidents.

During the data risk assessment process, organizations analyze their current
security controls and privacy measures to identify any weaknesses or gaps. This
assessment involves reviewing access controls, encryption methods, incident
response plans, and data classification systems. By examining these areas,
organizations can identify potential security control shortcomings and privacy
control shortcomings that could put sensitive data at risk.

Once the data risks have been assessed, organizations can then develop a
comprehensive roadmap to address and mitigate these risks. This plan outlines
specific actions and strategies to strengthen security controls and improve
privacy measures. It may include implementing additional encryption protocols,
enhancing access control measures, conducting regular security audits, and
providing ongoing training to employees to ensure they are aware of the latest
data risks and best practices.
 Mitigation Measures Description

Enhanced Data Encryption Implementing robust encryption protocols to protect sensitive data from unauthor

Strengthening access control measures to ensure only authorized individuals can

Improved Access Controls
data.

Conducting periodic audits to evaluate the effectiveness of security controls and i

Regular Security Audits
vulnerabilities.

Ongoing Employee Providing regular training sessions to employees to educate them on data risks an
Training protocols.

By implementing these mitigation measures and following the roadmap

developed through data risk assessments, organizations can significantly reduce
the likelihood of data breaches and better protect their valuable assets. Regular
assessments and proactive risk management are crucial in today’s digital
landscape, where the threat landscape is constantly evolving, and organizations
must stay one step ahead to safeguard their data.

Conclusion and Key Takeaways

In conclusion, data risk analysis is essential for organizations to identify and

manage potentially risky data, and implementing effective data risk management
strategies is crucial for success in the digital landscape. With the increasing
prevalence of remote work, cyber security breaches, and cloud security risks,
organizations face significant financial and reputational consequences if they fail
to address data risk adequately.

Poor data governance, data mismanagement, inadequate data security, and bad
patch management are among the key contributors to data risk. To mitigate
these risks, organizations should focus on strategies such as data classification,
access control measures, regular data risk assessments, encryption, and
incident response planning. By implementing these measures, organizations can
proactively identify and address potential vulnerabilities before they lead to data
breaches.

Stakeholder involvement is critical in effective data risk management.

Collaboration between departments, including CISOs, CIOs, and cybersecurity
professionals, ensures that data risks are addressed comprehensively and in a
timely manner. The role of artificial intelligence in data risk management cannot
be overstated. AI-powered technologies enable organizations to enhance
predictive analytics, detect fraudulent activities, bolster cybersecurity defenses,
and ensure compliance with data protection regulations.

The financial services industry, in particular, faces unique data risk challenges
due to its high-risk data targets. Therefore, it is crucial for organizations in this
sector to prioritize data risk management and implement robust strategies and
controls accordingly. To maintain a proactive approach, regular data risk
assessments should be conducted to identify any security or privacy control
shortcomings. These assessments will help organizations develop a mitigation
roadmap to address potential gaps and minimize data risk.

Key Takeaways

Data risk analysis is essential for organizations to identify and manage potentially risky data.

Implementing effective data risk management strategies is crucial for success in the digital landscape.

Poor data governance, data mismanagement, inadequate data security, and bad patch management contribute to

Data classification, access control measures, regular risk assessments, encryption, and incident response planni
strategies for mitigating data risk.

Stakeholder involvement, including CISOs, CIOs, and cybersecurity professionals, is vital for comprehensive d
management.
 Artificial intelligence aids in predictive analytics, fraud detection, cybersecurity, and compliance activities, enh
management capabilities.

The financial services industry faces high-risk data targets and should prioritize data risk management.

Regular data risk assessments help identify security and privacy control shortcomings and develop a roadmap f

About Our Data Risk Analysis Services

Our professional team offers data risk analysis services to help organizations
strategize the best defenses for their data, ensuring risk-free success in the ever-
evolving digital landscape. With the increasing prevalence of remote work, cyber
security breaches, and cloud security risks, data risk analysis has become an
essential practice for organizations seeking to identify and manage potentially
risky data.

Our comprehensive approach to data risk analysis involves analyzing the unique
challenges faced by each organization and developing tailored strategies to
mitigate data risks. We emphasize the importance of implementing data
classification systems to effectively categorize and manage different types of
data. By implementing access control measures, we help organizations establish
secure data access protocols, ensuring that only authorized personnel can
access sensitive information.

Regular data risk assessments are a key aspect of our services, enabling
organizations to identify security and privacy control shortcomings. Through
thorough assessments, we help organizations uncover vulnerabilities and
develop a roadmap for mitigating these risks. Additionally, our team specializes
in encryption techniques to safeguard data from unauthorized access and
provide incident response planning to handle potential data breaches effectively.

Our Data Risk Analysis Services

Data Classification
 Access Control Measures

Regular Data Risk Assessments

Encryption Solutions

Incident Response Planning

By leveraging artificial intelligence technologies, our data risk analysis services

enable organizations to enhance their risk management capabilities. We employ
advanced predictive analytics and AI-driven fraud detection techniques to
proactively identify and mitigate potential threats. Our expertise in cybersecurity
and compliance activities ensures that organizations stay ahead of emerging
risks and maintain compliance with industry regulations.

Expert Guidance and Collaboration

We understand that effective data risk management requires collaboration and

involvement from various stakeholders. Our team works closely with CISOs,
CIOs, and cybersecurity professionals to develop comprehensive risk
management strategies that align with an organization’s goals and objectives.

In the financial services industry, where high-risk data targets are prevalent, our
data risk analysis services provide tailored solutions to address industry-specific
challenges. We help financial organizations implement robust data risk
management practices to safeguard customer information, prevent data
breaches, and maintain public trust.

At [Organization Name], we are committed to delivering professional data risk

analysis services that empower organizations to mitigate data risks effectively.
Our aim is to help organizations protect their valuable data assets and ensure
risk-free success in today’s complex digital landscape.

Get Started with Data Risk Analysis Today

Don’t wait to protect your data – get started with data risk analysis today by
contacting us for more information or to schedule a consultation. At our
professional team, we understand the importance of identifying and managing
potentially risky data in today’s digital landscape. With the increasing prevalence
of remote work, cyber security breaches, and cloud security risks, organizations
are facing a higher risk of data breaches than ever before.

Through our data risk analysis services, we can help you mitigate the financial
impact of data breaches. Our expert team specializes in addressing the main
factors that contribute to data risk, such as poor data governance, data
mismanagement, inadequate data security, and bad patch management.
Together, we can strategize the best defenses for your data, ensuring risk-free
success in this fast-paced digital era.

By leveraging strategies such as data classification, access control measures,

regular data risk assessments, encryption, and incident response planning, we
can enhance your data risk management capabilities. With the involvement of
stakeholders from various departments, including CISOs, CIOs, and cybersecurity
professionals, we ensure a comprehensive approach to data risk management.

Furthermore, we recognize the role that artificial intelligence plays in effective

data risk management. Our team harnesses AI technology for predictive
analytics, fraud detection, cybersecurity, and compliance activities, enabling us to
stay one step ahead of potential risks.

The financial services industry, in particular, faces high-risk data targets. Our
specialized expertise in data risk management in this industry allows us to
provide the extra attention and protection needed to safeguard your sensitive
information.

It’s crucial to conduct regular data risk assessments to identify any security and
privacy control shortcomings. Our team can help you develop a mitigation
roadmap to address these risks proactively, minimizing the potential impact on
your organization.

Don’t delay in taking action. Contact us today to learn more about our data risk
analysis services and how we can assist you in safeguarding your valuable data.
Together, we can ensure a secure a risk-free future for you all.
Why Is Data Security Important?
Data breaches can have catastrophic consequences for a business, which
may include direct financial loss, reputational damage, compliance
violations, and legal exposure. Research shows the average cost of a data
breach in the US is over $4 million.

The most serious impact a security breach can have on a company is

financial loss. But it also destroys brand equity and customer trust. For
large enterprises, the impact can be in the billions of dollars. When a
serious data breach occurs, many consumers and partners will end their
relationship with a brand.

For these reasons, having strong policies and security controls in place to
safeguard sensitive data is critical to business continuity and success.

Data Security vs. Data Privacy

Data security refers to the precautions taken by an organization to prevent
unauthorized access, usage, disclosure, disruption, alteration, or
destruction of its digital assets. This involves implementing various
technologies such as firewalls, antivirus software, and intrusion detection
systems (IDS). It also includes developing policies and procedures for
managing access control, encryption standards, and incident response
plans.

Data privacy, on the other hand, concentrates on ensuring that personal

information is collected, stored, and processed in a manner that respects
individual rights while adhering to relevant laws and regulations like
the General Data Protection Regulation (GDPR) or the California Consumer
Privacy Act (CCPA). This covers aspects such as:

• Obtaining consent from users before gathering their data

• Limiting data collection to specific purposes only
• Anonymizing personal information when possible
• Granting individuals access to their records
• Offering mechanisms for rectifying inaccuracies in personal data
• Informing affected parties about breaches involving sensitive
information.
Top Data Security Threats
Social Engineering Attacks
Social engineering attacks are a major vector used by maliciou actors to
gain access to sensitive data. They involve manipulating or tricking
individuals into providing personal information or allowing access to
privileged accounts.

Phishing is a common social engineering technique. In a phishing attack,

threat actors send messages that appear to come from trusted sources, but
are in fact malicious. For example, the attacker could send an email that
appears to come from the victim’s bank, encouraging them to change their
password. When the victim clicks the link, they are taken to a fake login
screen, which delivers their credentials to the attacker.

Security Misconfiguration
Security configuration errors occur when security settings are not correctly
defined, or systems are set up with their default security configuration,
which is typically not secure. There are several industry security standards
that define what security configurations should look like (for example, CIS
benchmarksa and the OWASP Top 10). If configurations do not meet these
standards, they can represent a severe business risk.

Misconfiguration often occurs when an administrator, developer, or

database owner fails to properly configure security for a website,
application, database, or server, leaving a door open for attackers.
Misconfiguration can lead to large-scale data breaches. Misconfiguration
exploits can have consequences like business disruption, reputational
damage, legal exposure, and regulatory fines.

Shadow IT
Shadow IT is the unauthorized use of third-party applications, software, or
Internet services in a workplace. The reason Shadow IT is so popular is
because employees often prefer applications or technologies that are more
efficient and convenient than company-approved alternatives.
The problem with shadow IT is that an organization is are unaware it is
happening, and shadow IT systems create a blind spot in their cybersecurity
strategy. These third-party services often have weak security measures, or
may not have the appropriate security configuration. This can lead to data
breaches, compliance violations, and legal liability, because companies are
held accountable for sensitive data stored by their employees in
unauthorized locations.

If shadow IT is prevalent, it might indicate that a company does not provide

its employees the most suitable tools for their job. Organizations need to
have open conversations with their employees, understand their technical
needs, and make their best effort to meet them.

Another solution is data loss prevention (DLP) tools, which can

automatically stop employees from uploading or sending sensitive
information, and can help monitor data flows to provide visibility over
shadow IT within an organization.

Ransomware Attacks
In a ransomware attack, threat actors infect an organization’s systems with
malware to encrypt all data. Users are unable to access the data and are
asked to pay a ransom to regain access through a virtual currency like
Bitcoin. Ransomware can spread via malicious email attachments, infected
external storage devices, software applications, and compromised websites.

Backing up sensitive data is a crucial countermeasure against ransomware.

However, some types of ransomware can infect backups as well. This makes
it important to store a backup offline or in a separate site that cannot be
infected by ransomware targeting the primary data center.

Advanced Persistent Threat Attacks

An Advanced Persistent Threat (APT) is a targeted cyberattack, in which a
group of sophisticated threat actors penetrate a network and dwell in it.
APT attackers can remain in a network, undetected, for months or even
years. Typically, their goal is to monitor network activity, identify sensitive
data, and steal it or use techniques like ransomware to extort the
organization. Cybercriminals often execute APT attacks to target a high-
value target, such as a large corporation or country, to steal data and cause
major damage over time.

Learn more about these and additional threats in our guide to data security
threats (coming soon)

Data Security Regulations

Protecting sensitive data is becoming a major focus for governments and
regulatory authorities, and numerous regulations have been established to
ensure organizations maintain high standards of security. Compliance with
these regulations is especially important for businesses handling personal
or financial data, as non-compliance can lead to severe penalties.

Common regulations that affect data security include:

• General Data Protection Regulation (GDPR): The GDPR is an extensive

privacy regulation enacted by the European Union (EU), which
dictates how companies collect, process, store, and share personal
data of EU citizens.
• California Consumer Privacy Act (CCPA): The CCPA grants specific
rights to California residents regarding their personal information and
mandates businesses operating within the state to disclose their
practices related to collecting, using, and sharing such information.
• Health Insurance Portability and Accountability Act (HIPAA): HIPAA is a
US federal law that establishes standards for safeguarding sensitive
patient health information held by healthcare providers, insurance
companies, and other covered entities.
• Sarbanes-Oxley (SOX) Act: Enacted in response to corporate
accounting scandals, this US legislation imposes strict requirements
on publicly traded companies concerning financial reporting
processes and internal controls over financial systems.
• Payment Card Industry Data Security Standard (PCI DSS): PCI DSS is a
set of security standards aimed at ensuring all companies processing,
storing, or transmitting credit card information maintain a secure
environment.
• International Standards Organization (ISO) 27001: ISO 27001 is a
globally recognized standard for managing information security risks
and implementing effective controls within organizations.
Complying with these regulations not only helps businesses avoid penalties
but also fosters trust with customers by showcasing their commitment to
data protection and privacy.

Data Security in the Cloud

Data security in cloud computing involves combining technologies,
procedures, and policies to protect cloud systems, applications, and data.

Data security is essential at all stages of the cloud computing process and
data lifecycle, including development, deployment, migration, and
management. Cloud environments pose various data security risks that your
security strategy must address. The main risk is a data breach or attack.

Cloud computing introduces new threats in addition to those affecting on-

premise infrastructure. Common data threats in the cloud include:

• Insecure APIs—cloud applications and services usually depend on API

functionalities, exposing them to API vulnerabilities.
• Account takeover—attackers can exploit weak or compromised
credentials to hijack user accounts in the cloud.
• Insider threats—in the cloud, it’s harder to track malicious insiders.

Another major issue with cloud environments is the lack of clarity about
who is responsible for security. On-prem security is the organization’s sole
responsibility, but in the cloud, you share security responsibilities with the
vendor. Navigating shared security controls can be tricky, and the shared
responsibility differs between cloud models.

The cloud provider is always responsible for securing the physical

infrastructure, and the customer is always responsible for securing its data.
Other security aspects can be a source of confusion. In short, you must
understand the specifics of your cloud vendor’s shared responsibility
security model and ensure you implement the right measures.

Related content: Read our guide to data security in cloud computing

(coming soon)
Data Security Policies
Data security policies outline how an organization must handle sensitive
data such as customer and employee information and IP. Your data security
policy should cover two main categories: policies applied to people and
technologies.

Common policies governing behavior of people in the

organization:
• Acceptable data use—an acceptable use policy should appear when
users first log into the corporate network. It defines normal and
unacceptable behaviors, including restrictions on using corporate
resources and data for outside activities.
• Email—the policy must specify rules for email-based communications,
including encryption requirements and anti-phishing measures.
• Reporting—the policy should outline security incident reporting
procedures, specifying who is responsible for handling data breaches
and how.
• Auditing—the policy should specify the required audit control level
and explain how auditing activities can help ensure regulatory
compliance.
Common policies governing the use of technology in the
organization:
• System security—this involves physical and digital security measures
to protect systems, servers, and other assets. The policy may include
backup, configuration, and restoration requirements.
• Mobile device management—widespread use of mobile devices
presents a security challenge that data security policies must address.
For example, you might implement network segmentation to insulate
the company intranet from employee devices.
• Data encryption—this is essential to protect data at rest and in
transit, ensuring that outsiders cannot read leaked or stolen data. The
policy may classify data, stipulating different encryption levels for
each data type.
• Software management—the policy should outline how the
organization maintains inventory, manages software licenses, and
 applies patches when needed. These processes usually involve
automated tools and scanners.
• Backup and recovery—this involves protecting backups with physical
and digital security measures, including periodic tests to ensure
successful data recovery. You might build a dedicated recovery
environment.

Related content: Read our guide to data security best practices

Data Security Solutions and Technologies

A data security program typically covers a set of protective technologies
and mechanisms. It can include various sophisticated data security
techniques to protect critical IT assets. However, effective data security
requires implementing these mechanisms as part of a holistic data
protection program.

Here are notable technologies you can add to your data security stack:

Data discovery and classification

A data discovery solution scans data repositories and generates reports on
findings to help you avoid storing sensitive data in an unsecured location
that can expose it to threats. Data classification involves labeling sensitive
data with tags to help prioritize data protection according to the data’s
value and the relevant regulatory requirements.

Data encryption
This mechanism encodes data to make it unreadable and useless for
unauthorized parties. You can use a software-based data encryption
solution to protect data before writing it to a solid-state drive (SSD).

Alternatively, you can use hardware-based encryption. It involves using a

separate processor to encrypt and decrypt sensitive data on portable
devices, like USB drives and laptops.

Dynamic data masking (DDM)

You can use this data security technique to implement real-time masking
for sensitive data. It can help preserve the original data while preventing
exposure to non-privileged users.

User and entity behavior analytics (UEBA)

This technology can identify abnormal activity that might indicate a real
threat. You can employ UEBA to detect insider threats and compromised
accounts.

Change management and auditing

A change management and auditing procedure can help spot
misconfigurations quickly. These mechanisms are critical to preventing
accidental or malicious changes to IT systems that might lead to breaches
or downtime.

Identity and access management (IAM)

This technology can help you manage regular and privileged user accounts.
It provides capabilities that enable you to control user access to digital
assets, including critical information.

Backup and recovery

Organizations must have a mechanism in place for promptly restoring data
and operations—a disaster recovery plan that includes clear steps for
retrieving lost data as well as managing incident response. It should work
for relatively benign scenarios, for example, when a user accidentally
deletes a file they urgently need.

In addition to benign scenarios, the plan should also set up measures for
critical events with severe impacts. Critical disaster events include server
failures, natural disasters, and targeted attacks that can bring down an
entire network.

Related content: Read our guide to data security solutions (coming soon)

Data Security Best Practices and Strategies

Identify and Classify Sensitive Data
To effectively protect your data, you need to know what data you have and
its level of sensitivity. First, ask the security team to scan all data stores and
report the results. You can later categorize the data according to its value
to the organization.

Classifications should be updated immediately when data is created,

processed, modified, or submitted. It is also helpful to have a strategy to
prevent users from changing the classification level. For example, only
authorized users should have permission to upgrade or downgrade data
classifications.

Set an Information Security Policy to Protect Your Data

Data can be in a structured or unstructured form and reside in your
database, cloud storage bucket, file system, and so on. Most organizations
store large amounts of data, which means some data might be forgotten or
ignored. Protecting your organization from data breaches requires
protecting everything from the largest database to an individual file via the
same overarching security policy.

This requires a single cybersecurity policy for all data, no matter where it
resides. You must be able to enforce this policy across all datasets in the
organization, receive alerts about violations, and respond to them.

Deploy An Identity And Access Management Solution

Unauthorized access is a critical threat to sensitive data. Attackers are
constantly finding new methods to access sensitive data, and an identity
and access management (IAM) solution can help.

Look for an IAM solution with the ability to define least-privilege access
policies and enforce all access rules. The IAM policies should relate to role-
based permissions. Additionally, you can use multi-factor authentication
(MFA) to reduce the risk of unauthorized access to sensitive data, even if a
malicious attacker compromises user credentials.

Modern IAM solutions can support hybrid environments, including private

data center and public cloud deployments. This simplifies end-user
authentication and makes it easier to enforce policies consistently across
your IT environments.

Implement Employee Security Training

Having security guidelines is not enough—companies should train all
employees to explain the policies, teach them how to manage sensitive
information, and provide instructions on how to respond to suspicious
events and activities.

Employees should also be trained in data security best practices with

respect to both internal and external attacks. Employees should be
instructed to lock sensitive information while away from their computer,
avoid clicking on links from untrusted sources, set strong, unique
passwords, and be aware of the least privilege principle (for example,
letting security teams know if someone on a team has too many
permissions, or if an old account has not been revoked).

Related content: Read our guide to data security best practices (coming
soon)

Data Protection with Cloudian

Data protection requires powerful storage technology. Cloudian’s storage
appliances are easy to deploy and use, let you store Petabyte-scale data
and access it instantly. Cloudian supports high-speed backup and restore
with parallel data transfer (18TB per hour writes with 16 nodes).

Cloudian provides durability and availability for your data. HyperStore can
backup and archive your data, providing you with highly available versions
to restore in times of need.

In HyperStore, storage occurs behind the firewall, you can configure geo
boundaries for data access, and define policies for data sync between user
devices. HyperStore gives you the power of cloud-based file sharing in an
on-premise device, and the control to protect your data in any cloud
environment.
Data processing
[edit]
Main article: Electronic data processing

Ferranti Mark I computer logic board

Storage
[edit]
 Punched tapes were used in early computers to
store and represent data.
Main article: Data storage
Early electronic computers such as Colossus made use of punched tape, a long strip of paper on which data was
represented by a series of holes, a technology now obsolete.[21] Electronic data storage, which is used in modern
computers, dates from World War II, when a form of delay-line memory was developed to remove the clutter
from radar signals, the first practical application of which was the mercury delay line.[22] The first random-access digital
storage device was the Williams tube, which was based on a standard cathode ray tube.[23] However, the information
stored in it and delay-line memory was volatile in the fact that it had to be continuously refreshed, and thus was lost
once power was removed. The earliest form of non-volatile computer storage was the magnetic drum, invented in
1932[24] and used in the Ferranti Mark 1, the world's first commercially available general-purpose electronic
computer.[25]

IBM introduced the first hard disk drive in 1956, as a component of their 305 RAMAC computer system.[26]: 6 Most
digital data today is still stored magnetically on hard disks, or optically on media such as CD-ROMs.[27]: 4–5 Until 2002
most information was stored on analog devices, but that year digital storage capacity exceeded analog for the first
time. As of 2007, almost 94% of the data stored worldwide was held digitally:[28] 52% on hard disks, 28% on optical
devices, and 11% on digital magnetic tape. It has been estimated that the worldwide capacity to store information on
electronic devices grew from less than 3 exabytes in 1986 to 295 exabytes in 2007,[29] doubling roughly every 3
years.[30]

Databases
[edit]
Main article: Database
Database Management Systems (DMS) emerged in the 1960s to address the problem of storing and retrieving large
amounts of data accurately and quickly. An early such system was IBM's Information Management
System (IMS),[31] which is still widely deployed more than 50 years later.[32] IMS stores data hierarchically,[31] but in the
1970s Ted Codd proposed an alternative relational storage model based on set theory and predicate logic and the
familiar concepts of tables, rows, and columns. In 1981, the first commercially available relational database
management system (RDBMS) was released by Oracle.[33]

All DMS consist of components, they allow the data they store to be accessed simultaneously by many users while
maintaining its integrity.[34] All databases are common in one point that the structure of the data they contain is defined
and stored separately from the data itself, in a database schema.[31]

In recent years, the extensible markup language (XML) has become a popular format for data representation.
Although XML data can be stored in normal file systems, it is commonly held in relational databases to take
advantage of their "robust implementation verified by years of both theoretical and practical effort." [35] As an evolution
of the Standard Generalized Markup Language (SGML), XML's text-based structure offers the advantage of being
both machine- and human-readable.[36]

Transmission
[edit]
 IBM card storage warehouse located in Alexandria, Virginia in
1959. This is where the government kept storage of punched cards.
Data transmission has three aspects: transmission, propagation, and reception. [37] It can be broadly categorized
as broadcasting, in which information is transmitted unidirectionally downstream, or telecommunications, with
bidirectional upstream and downstream channels.[29]

XML has been increasingly employed as a means of data interchange since the early 2000s,[38] particularly for
machine-oriented interactions such as those involved in web-oriented protocols such as SOAP,[36] describing "data-in-
transit rather than... data-at-rest".[38]

Manipulation
[edit]
Hilbert and Lopez identify the exponential pace of technological change (a kind of Moore's law): machines'
application-specific capacity to compute information per capita roughly doubled every 14 months between 1986 and
2007; the per capita capacity of the world's general-purpose computers doubled every 18 months during the same
two decades; the global telecommunication capacity per capita doubled every 34 months; the world's storage
capacity per capita required roughly 40 months to double (every 3 years); and per capita broadcast information has
doubled every 12.3 years.[29]

Massive amounts of data are stored worldwide every day, but unless it can be analyzed and presented effectively it
essentially resides in what have been called data tombs: "data archives that are seldom visited". [39] To address that
issue, the field of data mining — "the process of discovering interesting patterns and knowledge from large amounts
of data"[40] — emerged in the late 1980s.[41]

Services
[edit]
Email
[edit]
The technology and services it provides for sending and receiving electronic messages (called "letters" or "electronic
letters") over a distributed (including global) computer network. In terms of the composition of elements and the
principle of operation, electronic mail practically repeats the system of regular (paper) mail, borrowing both terms
(mail, letter, envelope, attachment, box, delivery, and others) and characteristic features — ease of use, message
transmission delays, sufficient reliability and at the same time no guarantee of delivery. The advantages of e-mail are:
easily perceived and remembered by a person addresses of the form user_name@domain_name (for example,
somebody@example.com); the ability to transfer both plain text and formatted, as well as arbitrary files;
independence of servers (in the general case, they address each other directly); sufficiently high reliability of
message delivery; ease of use by humans and programs.

Disadvantages of e-mail: the presence of such a phenomenon as spam (massive advertising and viral mailings); the
theoretical impossibility of guaranteed delivery of a particular letter; possible delays in message delivery (up to
several days); limits on the size of one message and on the total size of messages in the mailbox (personal for
users).

Search system
[edit]
A software and hardware complex with a web interface that provides the ability to search for information on the
Internet. A search engine usually means a site that hosts the interface (front-end) of the system. The software part of
a search engine is a search engine (search engine) — a set of programs that provides the functionality of a search
engine and is usually a trade secret of the search engine developer company. Most search engines look for
information on World Wide Web sites, but there are also systems that can look for files on FTP servers, items in
online stores, and information on Usenet newsgroups. Improving search is one of the priorities of the modern Internet
(see the Deep Web article about the main problems in the work of search engines).

Commercial effects
[edit]
Companies in the information technology field are often discussed as a group as the "tech sector" or the "tech
industry."[42][43][44] These titles can be misleading at times and should not be mistaken for "tech companies;" which are
generally large scale, for-profit corporations that sell consumer technology and software. It is also worth noting that
from a business perspective, Information technology departments are a "cost center" the majority of the time. A cost
center is a department or staff which incurs expenses, or "costs", within a company rather than generating profits or
revenue streams. Modern businesses rely heavily on technology for their day-to-day operations, so the expenses
delegated to cover technology that facilitates business in a more efficient manner are usually seen as "just the cost of
doing business." IT departments are allocated funds by senior leadership and must attempt to achieve the desired
deliverables while staying within that budget. Government and the private sector might have different funding
mechanisms, but the principles are more-or-less the same. This is an often overlooked reason for the rapid interest in
automation and Artificial Intelligence, but the constant pressure to do more with less is opening the door for
automation to take control of at least some minor operations in large companies.

Many companies now have IT departments for managing the computers, networks, and other technical areas of their
businesses. Companies have also sought to integrate IT with business outcomes and decision-making through a
BizOps or business operations department.[45]

In a business context, the Information Technology Association of America has defined information technology as "the
study, design, development, application, implementation, support, or management of computer-based information
systems".[46][page needed] The responsibilities of those working in the field include network administration, software
development and installation, and the planning and management of an organization's technology life cycle, by which
hardware and software are maintained, upgraded, and replaced.

Information services
[edit]
Information services is a term somewhat loosely applied to a variety of IT-related services offered by commercial
companies,[47][48][49] as well as data brokers.

U.S. Employment distribution of computer systems design and related services, 2011 [50]

•
 U.S. Employment in the computer systems and design related services industry, in thousands, 1990–2011[50]

U.S. Occupational growth and wages in computer systems design and related services, 2010–2020[50]

U.S. projected percent change in employment in selected occupations in computer systems design and related
services, 2010–2020[50]

U.S. projected average annual percent change in output and employment in selected industries, 2010–2020[50]
Ethics
[edit]
Main article: Information ethics
The field of information ethics was established by mathematician Norbert Wiener in the 1940s.[51]: 9 Some of the ethical
issues associated with the use of information technology include:[52]: 20–21

• Breaches of copyright by those downloading files stored without the permission of the copyright holders
• Employers monitoring their employees' emails and other Internet usage
• Unsolicited emails
• Hackers accessing online databases
• Web sites installing cookies or spyware to monitor a user's online activities, which may be used by data
brokers

IT projects
[edit]
Research suggests that IT projects in business and public administration can easily become significant in scale. Work
conducted by McKinsey in collaboration with the University of Oxford suggested that half of all large-scale IT projects
(those with initial cost estimates of $15 million or more) often failed to maintain costs within their initial budgets or to
complete on time.
What are Information Systems?

Information systems are collections of multiple information resources to gather,

process, store, and disseminate information.

Tools such as laptops, databases, networks, and smartphones are examples of

information systems. So yes, as you read this article, you’re employing an information
system! Many people rely on various information systems to communicate with friends
and family, bank or shop online, or look up information via a search engine.

Companies and organizations employ information systems to communicate and work

with their customers and suppliers, manage the organization, perform essential
business operations, and roll out and maintain marketing campaigns.

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Six Major Types of Information Systems

Now that we have dealt with the basics let's look at the six primary types of information
systems. Although information systems are not limited to this list, typical businesses
and organizations have the following six, each system supporting a different
organizational level.

For starters, we have the transaction processing systems (TPS) at the operational level.
Next are the office automation systems (OAS) and knowledge work systems (KWS),
both at the knowledge level. Next, the management level has the management
information systems (MIS) and decision support systems (DSS), and we conclude with
the executive support systems (ESS) at the strategic level.
Let’s explore the different types of information systems in more depth. If you're
interested in advancing your understanding of cybersecurity across these various levels,
consider attending cybersecurity certifications to gain specialized knowledge and
hands-on experience in protecting information systems at every organizational level.

1. Transaction Processing System (TPS)

Transaction processing is essential to helping businesses perform daily operations.

Transactions are any activity or event affecting the company and include deposits,
withdrawals, shipping, billing customers, order entry, and order placement. TPS
supports these business transactions.

Example

A point-of-sale (POS) system used in retail stores, where each sale is recorded and
processed immediately, updating inventory levels and generating a receipt for the
customer.

2. Office Automation System (OAS)

OAS comprises computers, communication-related technology, and personnel assigned

to perform official tasks. It covers office transactions and supports official activity at
every level in the organization, subdivided into managerial and clerical activities.

Office automation systems include the following applications:

• Email: The email application also covers file attachments such as audio,
video, and documents.
 • Voice Mail: This application records and stores phone messages in the
system’s memory, which can be retrieved anytime.

• Word Processing: Word processing covers the creation of documents,

including memos, reports, letters, and anything else that’s printable
electronically. The created text can be copied, edited, and stored via word
processing commands, and it can be checked for grammar and spelling, line
and word counting, and headers and footers.

Example

Microsoft Office Suite, where tools like Word, Excel, and Outlook help employees
automate tasks such as document creation, data analysis, and email communication,
improving overall productivity.

3. Knowledge Work System (KWS)

The KWS is a specialized system that expedites knowledge creation and ensures the
business's technical skills and knowledge are correctly applied. The Knowledge Work
System aids workers in creating and disseminating new information using graphics,
communication, and document management tools.

Example

CAD (Computer-Aided Design) is used by software engineers and architects to design

and test structures, enabling knowledge workers to create detailed models and
simulations.
4. Management Information System (MIS)

Middle managers handle much of the administrative chores for day-to-day routines and
performance monitoring, ensuring that all the work is aligned with the organization's
needs. That's why MIS is such a valuable tool. Management Information Systems are
designed to help middle managers and supervisors make decisions, plan, and control
the workflow. The MIS pulls transactional data from various Transactional Processing
Systems, compiles the information, and presents it in reports and displays.

Additionally, these reports can be produced monthly, quarterly, or annually, although

MIS can have more immediate reports (e.g., hourly, daily).

Example

An HR management system that generates reports on employee attendance,

performance, and payroll, helping managers make informed decisions about workforce
management.

5. Decision Support System (DSS)

The DSS is a management-level, interactive, computer-based information system that

helps managers make decisions. The Decision Support System gives middle managers
the information necessary to make informed, intelligent decisions.

Decision Support Systems use different decision models to analyze or summarize large
amounts of data into an easy-to-use form that makes it easier for managers to compare
and analyze information. Often, these summaries take the form of charts and tables.

Example
A financial forecasting system that uses data analysis and modeling to assist company
executives in making investment decisions by predicting future market trends.

6. Executive Support System (ESS)

The ESS is like the MIS but for executive-level decision-making. Because the decisions
involve company-wide matters, the stakes are higher, and they demand more insight
and judgment.

The ESS provides greater telecommunication, better computing capabilities, and more
efficient display options than the DSS. Executives use ESS to make effective decisions
based on summarized internal data taken from DSS, MIS, and external sources. In
addition, executive support systems help monitor performances, track competitors,
spot opportunities and forecast future trends.

Example

A dashboard system that provides CEOs with a real-time overview of key performance
indicators (KPIs) such as sales revenue, market share, and customer satisfaction,
enabling high-level decision-making and strategic planning.

What are the Main Applications of Information

Technology?

Although the system application descriptions hint at how they are best applied, let’s
spell out some of the chief information technology applications.

• Information/Data Storage
Although companies need good information to create better goods and services, they
must also have a reliable, cost-effective system to store the information that allows
rapid data access when required. In addition, a sound information system helps
businesses keep logs of essential activities and store valuable assets such as
communication records, revision histories, activity logs, operational data, and other
relevant documents.

By organizing information, businesses can understand why problems and roadblocks

occur and how to solve them.

• Rolling Out New Products and Services

Although there is an ever-increasing demand for new goods and services, any business
that wants to stay competitive needs information to make better decisions and offer
better products. Information systems help analyze independent processes and organize
the company's work activities. So, an information system allows a business to better
understand how it can design, create, and sell people's desired services or products.

• Simplified Decision Making

It’s challenging enough to make decisions, let alone consistently make the exact right
decisions. There are no guarantees that an organization’s decisions will work. However,
information systems help relieve some of the pain by offering information rapidly and
easily.

• Improving Employee Behaviors and Attitudes

Information systems can effectively improve communication between employers and

employees. An efficient information system empowers employees by making relevant
information more accessible, helping them become part of the decision-making
process. This empowerment boosts motivation and increases commitment to the
project or assignment.
Here are some broad categories that highlight types of information system applications:

• Communication. Information system applications allow rapid data sharing on

a global scale.

• Education. Information systems help make remote learning easier (particularly

useful during pandemics) and make people more comfortable with tech
advancements such as smartphones, tablets, and other network devices.

• Employment. The advent of information systems has directly resulted in the

creation of new positions, such as data analysts and cyber-security experts.

• Finance. Information systems make the transfer of funds more manageable

and more secure.

• Healthcare. Thanks to information systems, healthcare providers can access

vital medical records faster.

• Security. Information systems make it easier to employ data safeguards to

reduce the likelihood of a data breach or malware.