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robmoffat committed Jan 3, 2025
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attendant:
- tag: Reliability Risk
reason: "Carefully managing software configuration ensures that the reliability of dependencies is also managed."
- tag: Security Risk
reason: "Incorrect configuration management can lead to security vulnerabilities."
related:
- ../Planning-and-Management/Change-Management
- ../Tools-and-Standards/Version-Control
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2 changes: 1 addition & 1 deletion docs/practices/External-Relations/Outsourcing.md
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- tag: Communication Risk
reason: "May introduce communication challenges with external teams."
- tag: Security Risk
reason: "Potential risks related to data security and confidentiality."
reason: "Sharing responsibilities across multiple organisations can introduce new security risks."
- tag: Market Risk
reason: "Increasing the size of the supply chain introduces risks that the state of that supply chain changes with the market."
related:
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2 changes: 2 additions & 0 deletions docs/practices/Planning-And-Management/Delegation.md
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- tag: Schedule Risk
reason: "Distributes workload effectively, helping to meet deadlines."
attendant:
- tag: Security Risk
reason: "Delegating responsibility can introduce new security risks."
- tag: Coordination Risk
reason: "Increases the number of entities involved in project coordination."
- tag: Agency Risk
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2 changes: 1 addition & 1 deletion docs/practices/Planning-And-Management/Issue-Management.md
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- tag: Trust and Belief Risk
reason: "Tracking and fixing bugs improves software reputation."
- tag: Security Risk
reason: "Addresses and resolves security incidents to protect the organization."
reason: "Track and Prioritise Security Issues and Incidents."
attendant:
- tag: Complexity Risk
reason: "Managing an excessive number of logged issues can add complexity."
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53 changes: 52 additions & 1 deletion docs/risks/Environmental-Risks/Security-Risk/Security-Risk.md
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---
title: Security Risk
description: Risks due to hostile actors and events from inside or outside of the system.
description: Risks due to hostile agents and events from inside or outside of the system.

slug: /risks/Security-Risk

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---

<RiskIntro fm={frontMatter} />

Security Risk is a subset of [Operational Risk](/tags/Security-Risk) looking at dangers to the operation due to hostile agents (bad actors) or events occurring.

As we already discussed in [Agency Risk](/tags/Agency-Risk), _within_ a system we may wish to prevent our agents from causing accidental (or deliberate) harm, but we also have [Agency Risk](/tags/Agency-Risk) from unwanted agents _outside_ the system. So security is also about ensuring that the environment we work in is _safe_ for the good actors to operate in while keeping out the bad actors.

Interestingly, security is handled in very similar ways in all kinds of systems, whether biological, human or institutional:

- **Walls**: defences _around_ the system, to protect its parts from the external environment.
- **Doors**: ways to get _in_ and _out_ of the system, possibly with _locks_.
- **Guards**: to make sure only the right things go in and out. (i.e. to try and keep out _bad actors_).
- **Police**: to defend from _within_ the system against internal [Agency Risk](/tags/Agency-Risk).
- **Subterfuge**: hiding, camouflage, disguises, pretending to be something else.

These work at various levels in **our own bodies**: our _cells_ have _cell walls_ around them, and _cell membranes_ that act as the guards to allow things in and out. Our _bodies_ have _skin_ to keep the world out, and we have _mouths_, _eyes_, _pores_ and so on to allow things in and out. We have an _immune system_ to act as the police.

**Our societies** work in similar ways: in medieval times, a city would have walls, guards and gates to keep out intruders. Nowadays, we have customs control, borders and passports.

We're waking up to the realisation that our software systems need to work the same way: we have [Firewalls](https://en.wikipedia.org/wiki/Firewall_(computing)) and we lock down _ports_ on servers to ensure there are the minimum number of _doors_ to guard, we _police_ the servers with monitoring tools, and we _guard_ access using passwords and other identification approaches.

## Worked Example

For a firm wanting to strengthen its security posture, there is almost an unlimited variety of third party tools and services they can turn to to help them. The choice is bewildering and it's often hard to separate out the genuinely useful from the distractions.

![Security as a mitigation for Agency Risk](/img/generated/risks/posters/security-risk.svg)

In the diagram above, a firm decides to address security risk with training, multi-factor authentication schemes, endpoint detection and response (EDR) and encrypting it's data. In many scenarios, these are all good practices if implemented correctly. However, [Agency Risk](/tags/Agency-Risk) and [Security Risk](Agency-Risk#security) thrive on complexity: the more complex the systems we create, the more opportunities there are for bad actors to insert themselves and extract their own value. The dilemma is, _increasing security_ also means increasing [Complexity Risk](/tags/Complexity-Risk), because secure systems are necessarily more complex than insecure ones.

:::tip Anecdote Corner

CrowdStrike's Falcon tool is an Endpoint Detection and Response (EDR) tool designed to detect attacks aimed at compromising staff's personal computers, such as [ransomware](https://en.wikipedia.org/wiki/Ransomware), [Advanced Persistent Threats](https://en.wikipedia.org/wiki/Advanced_persistent_threat) and [Zero-Day Exploits](https://en.wikipedia.org/wiki/Zero-day_vulnerability). As more and more staff moved outside of corporate firewalls during the COVID-19 pandemic, tools like this were seen as more and more valuable.

However, what clients of CrowdStrike were unware of was the company's extremely lax approach to quality assurance of its product - they pushed code out to computers around the world without any rigorous testing, which was a disaster waiting to happen. In July 2024 a CrowdStrike release caused widespread sytems crashes and a global IT outage as Windows PC's rebooted over and over again, unable to start properly.

It is estimated that [Fortune 500 companies suffered $5.4bn of losses](https://nypost.com/2024/07/24/business/microsoft-to-take-hit-as-fortune-500-suffers-5-4b-in-crowdstrike-losses-study) due to the outage.

:::

## Regulation and Compliance



## Example Threats

**See:** [Mitre Att&ck](https://attack.mitre.org) is a database of Security Risk threats, broken down into:

- Tactics: the reasons why an adversary is performing an action.
- Techniques: how the adversary will attack.
- Defences: things you can do to defend against adversaries.


##
27 changes: 27 additions & 0 deletions src/images/generated/risks/posters/security-risk.adl
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xslt:template="/public/templates/risk-first/risk-first-template.xsl"
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<risk style="--kite9-horizontal-align: right; " class="complexity" />
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