Best Practices for Managing Information Security Risks

Information security risk management in many small and medium-sized enterprises falls between two extremes: either risks are handled too generally, or the process becomes a heavy Excel exercise that doesn’t guide daily decisions. The result is the same: management doesn’t get a clear picture of the biggest threats, and staff don’t know what to prioritize.

In this article, we’ll go through how to build information security risk management using the ISO 27001 framework in a way that truly benefits your business. You’ll get a practical model outlining which risks to assess, how to score them, how to prioritize actions, and how to keep the process alive without excessive administrative work.

What Does ISO 27001 Mean from a Risk Management Perspective?

ISO 27001 is an international standard for an information security management system, a systematic approach to managing information security. From a risk management standpoint, its core idea is simple: identify the key risks to your organization’s information, systems, and services; decide how to handle them; and ensure those decisions are reflected in practical operations.

This sounds straightforward, but in practice many stumble by separating risk management from business context. If you assess risks only at a general level, such as “cyber attack” or “human error,” you still don’t know what exactly needs protection, who is responsible, and in what timeframe. That’s why ISO 27001 guides you to tie risks to your specific operational environment.

A good starting point is to limit the assessment at least to these areas:

• core business processes
• key data assets like customer data and personnel information
• critical systems and cloud services
• external suppliers
• personnel workflows and access rights

Good Risk Management Starts with Scope, Not a Controls List

One of the most common mistakes is to start directly by listing controls, i.e., protective measures. Then an organization might adopt many practices without clearly understanding which risks are actually being mitigated. First, you need to define the scope, meaning which part of the business, services, and data the management system covers.

For an SME, a practical scope might be a single business unit, a SaaS service, or the entire customer data handling chain. The crucial part is that the scope is realistic and that the risks within it can be genuinely assessed. Starting too broadly slows the work; too narrowly risks leaving important dependencies out.

When you define the scope, answer at least these questions:

• Which services or processes are most critical to the business?
• What information is processed, and what would be the impact if it leaked, changed, or was lost?
• Which systems, personnel, and partners are involved in this scope?
• Which legal or contractual requirements affect information security?

Example: if your company provides software services to corporate clients, the assessment should at least include the production environment, customer data, admin accounts, backups, and subcontractors. This way, you quickly identify 3–5 key risks to address first.

Identifying Risks: Focus on Likely and Significant Scenarios

The aim of risk identification is not to create a complete threat catalog. It’s about finding scenarios that can genuinely disrupt business, cause a data breach, interrupt service, or breach contractual obligations. A good risk list is short, clear, and tied to your daily reality.

An effective approach is to look at risks through three questions:

• What valuable assets do we need to protect?
• How could they be threatened?
• What would be the business impact?

Typical SME information security risks include:

• employees or subcontractors having overly broad access rights
• lack of multifactor authentication for admin accounts
• untested backup restorations
• disruption or contractual deficiencies with critical SaaS providers
• phishing leading to credential misuse
• inadequate offboarding process causing delayed account deactivations

At this stage, assign an owner for each risk. A risk owner is not the person who fixes everything alone but the one who ensures the risk is assessed, treated, and monitored. In an SME, this could be the IT manager, service owner, or CEO.

Risk Assessment: Keep Scoring Simple and Comparable

Once risks are identified, they need to be assessed using the same logic. Typically, this involves two factors: how likely the risk is, and how severe its impact would be. Overly complex scoring slows the process, so for SMEs a scale of 1–3 or 1–5 suffices.

Below is a simple model you can use as a basis for ISO 27001 risk assessment:

You can calculate the risk level by multiplying the numbers. For example, likelihood 3 and impact 3 yields risk level 9, which is high. The math is less important than consistent evaluation methods.

The following table helps with prioritization:

Example: if admin accounts lack multifactor authentication and are used remotely, likelihood and impact might both be 3. This is not a “nice-to-have” improvement but an urgent risk to address immediately.

Risk Treatment: Choose Actions that Actually Reduce Risk

Risk assessment alone does not improve information security. The next step is to decide how to handle each risk. Risk treatment generally includes four options: reduce, avoid, transfer, or accept the risk. For SMEs, reduction is usually the most common and sensible approach.

Actions must be concrete, measurable, and time-bound. A poor entry would be “improve access management.” A good entry details what will be done, by whom, and by when.

Examples of good actions:

• deactivate departing employees’ accounts within 24 hours of termination
• implement multifactor authentication for all admin and remote access accounts within 30 days
• test backup restoration quarterly and document the results
• review critical supplier contracts within 2 months and verify information security obligations
• audit user rights 4 times a year with system owners

Annex A of ISO 27001 provides a set of controls—security measures—from which you choose those suitable for risk treatment. The idea is not to adopt everything just for safety but to justify why particular controls are necessary for your environment.

How to Keep Risk Management Alive in Daily Operations?

The best risk register becomes outdated quickly if updated only for audits. Therefore, integrate risk management into existing management rhythms: monthly meetings, change management, vendor reviews, and incident handling. This way, risks don’t remain a separate project.

A practical model for SMEs could look like this:

Use just a few clear metrics for monitoring. Too many metrics muddy the picture. Start with these, for example:

• number of open high risks
• percentage of actions completed on time
• speed of access revocation after employment ends
• success rate of backup restorations
• number of information security incidents detected per month

If you use a tool like the Tietoturvapankki service, documenting, assigning responsibility for, and tracking risk management becomes easier. This reduces manual work and helps demonstrate in audits that risk management isn’t just on paper.

What Benefits Does Good Risk Management Bring to SMEs?

Many think that ISO 27001 risk management is just for certification or customer requirements. These can be good drivers, but the biggest benefit usually comes from everyday decision-making. When you know which risks really matter, investments can be better targeted and the most urgent gaps fixed first.

Practical benefits include:

• fewer unexpected outages and access errors
• better readiness to respond to customer security questionnaires
• clearer responsibilities between management, IT, and service owners
• easier justification of security investments through business risks
• stronger foundation for certification and continuous improvement

If your organization already has ISO 9001 or another management system, risk management practices can often be integrated into the same model. This reduces duplicate work. Solutions developed by Softapankki Oy and QMClouds Oy, such as Tietoturvapankki and Laatupankki — the Group quality management brand, are based on the idea that management systems should be practical, not burdensome.