Cyber Risk

Question 1 – Learning Outcome 1 (10 marks)
You are the Risk Manager for a well established budget airline that specialises in seasonal leisure travel. One of the airline’s aircraft was involved in a near miss incident with another aircraft. This incident was filmed and the recording was subsequently released on social media.
You have been asked by the Board to investigate the effect of this incident on the public’s perception of the airline. As part of this investigation, you need to understand the influences on risk perception.
Explain, with justification, two significant issues influencing the public’s risk perception of the budget airline following this near miss incident.  (10)
Question 2 – Learning Outcome 2 (20 marks)
You are the Risk Manager for KC plc, a small online direct insurer. KC plc has built its business from start-up to profitability by focusing on technology, customer data and complex information technology (IT) systems.

One of KC plc’s competitors recently experienced a data breach. Subsequently, you have been asked by the Board to review the potential impact on KC plc’s business should technology/cyber risks occur.
(a) Explain, with justification, four significant technology/cyber risks that KC plc may experience.   (12)
(b) Explain briefly one risk management action KC plc could take to mitigate each of the four risks you have explained in (a) above.   (8)
Question 3 – Learning Outcome 3 (30 marks)
You are the Risk Manager for JH plc, a small financial company based in the UK. JH plc has recently been fined by the financial regulator for mis-selling products and taking unnecessary risks with client money.

JH plc’s lack of formal risk management procedures has been criticised by the regulator. The regulator has also criticised JH plc for inadequately documenting their risk appetite and risk tolerance.
The Board have instructed you to carry out a risk review. Following your review, the Board will determine a reduced level of acceptable risk appetite and risk tolerance to satisfy the regulator.
(a) Explain, with justification, two actions you could take to assist in managing the risks, that would support a reduced level of risk appetite and risk tolerance. (20)
(b) Explain, with justification, one recognised mechanism JH plc could adopt that will demonstrate effective risk management to the regulator. (10)