The attack surface for most organizations is constantly expanding, and security teams struggle to decide which parts of that surface deserve priority for effective risk mitigation. Traditional methods of ranking risks such as malware and ransomware on a high-, medium-, low- scale have unraveled as different people interpret those categories differently.
What’s needed: more accurate cyber risk assessments. Unclear terms must be turned into comprehensible numbers to give you the clarity and consensus to improve your cybersecurity posture.
That’s where cyber risk quantification (CRQ), a process to put your enterprise’s cyber risk in clearer business terms, comes into the picture.
How Can Businesses Quantify Cyber Risk?
The best way for businesses to quantify their cyber risk is by following the Factor Analysis of Information Risk (FAIR) framework. The FAIR framework is a leading methodology for cyber risk management developed by the non-profit FAIR Institute.
Under the FAIR model, businesses can quantify their cyber risk exposure as a dollar value instead of criticality value. The framework helps business leaders to describe cybersecurity efforts in simple terms so that all departments understand what needs to happen and how to align with cybersecurity initiatives.
While other cyber frameworks such as ISO and NIST are useful to identify necessary security controls, that analysis is geared for CISOs. Executive management (which doesn’t have security expertise) needs to understand the financial consequences of various cyberattack scenarios.
The FAIR model bridges that gap. In addition to quantifying the potential financial impact of various cyber risks, it provides security control and process solutions, helping business leaders to make informed cybersecurity decisions.
Besides the FAIR model, here are the other frameworks you can use to assess cyber risks:
- ISO 27005 is a monitoring and review framework that provides guidelines for information security risk assessments, including continuous risk assessment. Its main components are context establishment, risk assessment, risk treatment, risk acceptance, risk communication, and consultation.
- NIST SP 800-53 establishes control assessment procedures for government bodies. Private organizations can also use the framework to assure that security controls are correctly implemented and produce the desired outcome.
- OCTAVE (Operationally Critical Threat, Asset, and Vulnerability Evaluation) helps businesses evaluate security risks using ERM principles (OCTAVE FORTE) and streamlines and optimizes security risk assessments (OCTAVE Allegro).
- COBIT 5 facilitates consistent and accurate assessment of enterprise IT risks and their organizational impact.
What Is Automated Risk Assessment?
Automated risk assessment uses technology to evaluate and prioritize potential risks and vulnerabilities in your organization’s security posture.
These automated tools offer continuous and thorough data analysis, so they are more adept at identifying patterns and potential risks that manual processes may miss. They also generate reports and alerts to help risk management teams take the right action and minimize damages.
Automated risk assessment is a great solution for teams wanting to assess risk in a systematic and organized manner, as they get a comprehensive, consistent, and efficient view of their risks.
Benefits of Quantifying Cyber Risk
Cyber risk quantification results in the following benefits for your business:
Quantifying risk provides a clear, big-picture understanding of a risk event’s potential harm.
Instead of relying on intuition or judgment, you’ll have specific data to understand where to invest your resources to reduce risk exposure. This allows you to ensure you’re not overreacting (or underreacting) to vulnerabilities and potential threats, resulting in optimal risk management decisions.
Improved risk assessment objectivity and accuracy
Expressing cyber risk exposure in clear and precise terms removes the uncertainty and subjectivity of judgment-based risk assessments.
With data for everyone to see, there’s less confusion and debate about important issues, such as what your top three cyber risks are or which cyber controls are best for mitigating those risks.
Straightforward board and management communication
Cybersecurity jargon is often confusing for non-technical people. If your company’s board and management don’t understand the most critical and costly cyber threats, it will compromise their ability to analyze the situation and make sound decisions.
By measuring and communicating cyber risks in monetary terms, executives will know the potential financial harm of cyber threats. This allows CISOs to articulate cybersecurity risks better and prove the requirement for making cybersecurity investments.
Effective risk mitigation
Cyber risk quantification clarifies the effectiveness of implemented security controls. That’s useful to evaluate the soundness of your organization’s cybersecurity investments.
You can identify (and prioritize) the most effective control investments to reduce and mitigate risks more effectively, which makes your cyber risk mitigation efforts more productive.
As companies rely on a growing array of cybersecurity technologies, many business owners plan to start using qualitative risk assessment models like FAIR. These models, while primarily used for effectively controlling security issues, can also give business leaders a competitive edge over their rivals.
How? Cyber risk quantification gives you key insights to respond to cyber threats in a cost-effective and effective manner, improving your cyber maturity and resilience. That, in turn, drives enhanced credibility and customer trust.
How to Automate Cyber Risk Quantification
One can automate cyber risk quantification by using software tools to analyze data and generate insights that help you make informed decisions about cyber risk management.
Here’s how it works:
Step 1: Risk identification and prioritization
The first step is identifying and prioritizing the risk factors (for example, threat vectors, data sensitivity, vulnerabilities, and business impact) most relevant to your organization. This will help you determine and address the level of risk exposure and implement the required actions to mitigate them.
Step 2: Data collection
Collect relevant data on the identified risk factors and threats, along with related assets, vulnerabilities, and controls. This data can come from penetration tests, vulnerability scans, compliance reports, security logs, and incident response and business impact assessments.
While collecting data, be sure to standardize it for greater consistency and accuracy. For example, you can map different data sets to a common format or schema and resolve any inconsistencies and errors.
Step 3: Data analysis
Employ advanced analytics tools that leverage statistical and machine learning techniques to identify patterns, trends, and correlations indicating a potential cyber risk’s likelihood and impact.
Using this data, you can identify the most critical cyber risks, effective controls, and areas needing more investments.
Step 4: Risk model development
Next, you’ll develop risk models to quantify the identified risk factors based on factors like the likelihood of occurrence, remediation costs, external threat landscape, business objectives, and the potential damage to your company.
To build a risk model for cyber risk quantification, determine the relationships between each risk factor, such as the correlation between the number of vulnerabilities and the likelihood of a successful attack. Then define a risk equation to quantify the overall risk, considering the probability of an attack, the potential impact of a breach, and recovery costs.
Step 5: Risk management tool integration
To automate the risk quantification process, integrate the risk models with top-performing risk management and security automation platforms, such as security information and event management (SIEM) systems. This will help you identify the highest risk areas and implement risk and security compliance automation to enhance your risk mitigation efforts.
Also, validate the developed risk models by comparing the risk scores generated by the model with the actual occurrence of cyber incidents. Based on the validation results, the risk model may need to be refined to improve its accuracy by adding new risk factors, adjusting the risk equation, or updating the data sources.
Step 6: Continuous monitoring
Once the automated system is set up, you must continuously monitor it to assure that it provides accurate and up-to-date risk assessments. Consider any infrastructure or external tech landscape changes and ensure they’re reflected in the risk models.
Now the critical point: all of the above could be done manually, with spreadsheets and emails and human analysts; but the sheer volume of threats today makes that manual approach no longer feasible. Either the analysis will be wrong, or by the time you reach a conclusion it will be outdated, or both.
Companies need to embrace automation, because that’s the only way to keep pace with the modern threat landscape – which is huge and constantly evolving.
Manage Cyber Risk with the ROAR Platform
If you’re looking for a reliable automation risk management solution you can trust, look no further than the RiskOptics ROAR Platform.
ROAR provides a real-time view of your organization’s cyber risk posture and compliance, customized to your business’s priorities and objectives. It can also calculate real-time risk scores that are automatically updated to reflect risk changes, helping prioritize and reduce risk to acceptable levels.
Other features include a built-in content library with on-the-go access to provide your security team with expert guidance, best practices, and multiple pre-built integrations for unified and contextual insights.
Schedule a demo to learn how ROAR can automate your organizations’ cybersecurity and GRC efforts.