What is risk avoidance?

Risk avoidance is often used when dealing with highly sensitive information or in industries with strict compliance standards, such as healthcare or finance. Although effective at preventing certain security issues, this strategy can also limit access to innovative tools or technologies if there are potential risks.

In addition to risk avoidance, there are a range of strategies organizations can use to handle risks in cybersecurity, including risk avoidance, risk mitigation, risk transfer, and risk acceptance. Each strategy should align with the organization’s cybersecurity posture, the sensitivity of its data, and its tolerance to risks.

Eliminates exposure to certain threats by refraining from using software with known security vulnerabilities.

Focuses on minimizing the impact of threats by implementing multi-factor authentication (MFA) or advanced firewall configurations.

Involves such policies as cybersecurity insurance to cover potential damages from a breach, using third-party cloud services with their own security perimeters, or hiring managed security service providers to outsource cybersecurity.

An organization decides that a low-impact risk is manageable and prepares contingency plans instead of avoiding using software or a tool.

The primary advantage of risk avoidance is that it prevents exposure to specific types of cyber threats and effectively reduces the chance of breaches and data loss. By blocking access to known vulnerabilities, this approach enhances security. This is essential in industries handling sensitive or regulated information.

However, an overly cautious stance that follows risk avoidance can limit:

• Innovation: Avoidances can prevent the use of new technologies or services that carry some risk but offer competitive advantages for a business
• Agility: Businesses that adopt avoidance may be challenged to adapt to new business needs
• Protection: Ironically, avoiding threats can create vulnerabilities because evolving threats require adaptive, rather than entirely avoidant, approaches.

Risk avoidance can come in many forms, from decisions about specific software, regions, or devices. Examples include:

Businesses refuse to use outdated software that no longer receives security patches, preventing the risks associated with unpatched vulnerabilities.

Due to the prevalence of Distributed Denial of Service (DDoS) attacks, a company may decide to avoid the attack risk by removing Network Time Protocol (NTP) services. The organization removes any associated vulnerabilities by eliminating the service.

A company can avoid certain high-risk regions with weak data protection laws, reducing exposure to data interception or government surveillance. For instance, many governments require companies to maintain local data centers to store the personal data of the country's citizens. Depending on a particular government's reputation, a company may decide not to operate or do business with citizens of that country to avoid legal entanglements.

Some businesses reduce the risk of internal threats by designating access to critical systems through strict access control for specific roles or groups. Retailers follow this policy with Point of Sale security, where a limited group can access sensitive customer payment information.

Certain IoT devices may be considered vulnerable, and their use with company software or within a physical location is restricted. Likewise, employees may be restricted from using company-issued devices for personal activities or downloading certain types of apps or software onto the devices.