What Is a Security Risk Assessment and Why Your Business Needs One

A security risk assessment is a structured process for understanding your organization’s current security posture and identifying where risk exists across technology, people, and processes. The goal is to create clarity around what matters most, what can wait, and what needs attention before audits or major business changes.

For businesses that handle sensitive data or rely on external vendors, security risk assessments are foundational.

What does a security risk assessment examine?

A comprehensive security risk assessment evaluates how security operates across the organization, not just individual tools or systems.

Common areas include:

• Technology and infrastructure: cloud environments, networks, endpoints, system configuration, and critical services
• Identity and access management: authentication methods, MFA adoption, privileged access, and access review processes
• Data protection: encryption, backup and recovery, retention, and data handling practices
• Policies and governance: whether controls are documented, owned, reviewed, and followed
• Monitoring and incident response: logging, alerting, incident response readiness, and recovery capabilities
• Third-party and vendor access: how external vendors are evaluated, granted access, and monitored
• People and training: onboarding, offboarding, and ongoing security awareness

What do organizations typically discover during a security risk assessment?

Most organizations see similar patterns when they complete their first formal assessment. The issues can stem from neglect or failure to update processes over time.

Common findings include:

• Gaps in access control, such as inconsistent MFA enforcement or overly broad permissions
• Patch and vulnerability processes that exist but are not tracked to closure
• Policies that are outdated or do not reflect how teams actually work
• Limited monitoring and alerting, even when logs exist

The business impact of unmanaged security risk

Security risk becomes business risk when it affects revenue, operations, or trust.

Examples include:

• Operational disruption from outages, data loss, or prolonged incident recovery
• Contract and deal friction caused by failed customer security reviews or incomplete vendor questionnaires
• Compliance setbacks that delay audits or require repeated remediation cycles

According to IBM’s Cost of a Data Breach Report, the global average cost of a data breach reached $4.44 million in 2024. This figure reflects direct response costs, downtime, and long-term impact on trust.

Disaster recovery and business continuity often surface as hidden risk gaps

Security risk assessments often reveal gaps in business continuity and disaster recovery planning, even in organizations with robust technical controls in place. Missing or outdated BCDR documentation can slow incident response, extend downtime, and raise concerns during customer and third-party risk assessment reviews.

If you want a practical starting point, you can download a Business Continuity and Disaster Recovery (BCDR) template to understand what assessors typically expect and identify gaps in your current plans.

When should you conduct a security risk assessment?

Organizations commonly perform a security risk assessment:

• Before pursuing ISO 27001 or SOC 2 to meet customer expectations
• When customer security questionnaires or vendor risk assessment reviews delay deals
• After major changes such as product launches or acquisitions
• Following a security incident
• On a recurring basis aligned with risk tolerance and obligations

Many standards and requirements explicitly expect periodic risk assessment. For example, NIST 800-171 includes requirements for assessing risk related to protecting controlled unclassified information (CUI).

Security risk assessment vs penetration testing vs vulnerability scanning

These activities are related but serve different purposes:

• Security risk assessment: evaluates people, process, and technology to produce prioritized direction
• Vulnerability scanning: identifies known weaknesses using automated tools
• Penetration testing: simulated attacks conducted by a professional to validate whether systems can be compromised

What happens after a security risk assessment?

A strong assessment produces:

• A clear baseline of current posture
• Identified gaps and improvement areas tied to business impact
• Early “quick wins” that reduce exposure
• A roadmap teams can execute