The ceaseless rise in cyber attacks worldwide is a constant reminder that organizations must improve their cybersecurity stance. Merely complying with security and privacy regulations won’t cut it anymore; organizations need to take active measures to protect all their IT assets — including devices, data, and applications — from potential breaches.
That’s a lot of work, so businesses are also under greater pressure to assess and manage their cyber risk exposure accurately, including various risk scenarios. Quantifying risk provides valuable insight into a company’s vulnerabilities and helps develop more effective risk mitigation strategies.
What Is Cyber Risk Quantification?
Cyber risk quantification is the process of evaluating the potential financial cost of various cybersecurity events, such as data breaches and ransomware attacks. This approach uses data-driven metrics to assess the potential severity of identified cyber risks, which in turn provides insights that help the board members, CISOs (chief information security officers), security teams, and business leaders to prioritize their cybersecurity efforts. The goal of cyber risk quantification is to give decision-makers the knowledge they need to make informed decisions about risk mitigation and security investments.
In short, cyber risk quantification provides a more comprehensive understanding of the organization’s cyber risk posture, allowing security leaders to allocate resources more effectively and to respond to emerging threats with greater agility.
Benefits of Cyber Risk Quantification
Quantifying cyber risks and then integrating that data into periodic risk assessments can bring multiple advantages to a company and its stakeholders.
First, it offers a holistic view for all parties involved in managing cyber risk; and facilitates cooperation between CISOs and chief risk officers to minimize those risks.
Second, cyber risk quantification also lets an organization distribute its resources more efficiently. By evaluating the potential harm each risk poses, the organization can prioritize the risks and allocate its resources as needed.
For example, in some cases, the wiser course of action might be to solve a minor cybersecurity risk permanently. That permanent solution might deliver greater strategic benefits than simply reducing the damage that the risk could potentially cause.
The third benefit of cyber risk quantification is increased transparency and understanding across the enterprise. Quantifying cyber risk provides a common language for stakeholders to understand and communicate about the risk associated with their infrastructure, networks, and data. This lets security teams more clearly communicate the risk level to the board of directors, executive management, and other stakeholders.
FAIR Model for Cyber Risk Quantification
Organizations can assess the effect of cyber risks using the FAIR (Factor Analysis of Information Risk) approach, developed by the FAIR Institute.
FAIR takes a tactical approach to risk analysis, guiding executives to focus on precise details for a particular risk. Businesses can then establish risk reduction strategies and gain a more accurate understanding of their risk profile by evaluating scoped risk scenarios. Ultimately, security teams add up the aggregate potential damage of these scenarios to arrive at an estimate of the organization’s total loss exposure.
Companies, regardless of their current level of sophistication in managing cyber risks, can benefit from incorporating the use of the FAIR risk model into their cyber risk management approach. The overall goal is not to overhaul existing risk management initiatives and procedures fundamentally, but rather to optimize the risk management toolkit and provide a more comprehensive and practical approach to quantifying cyber risks.
Track and Manage Risks with the ROAR Platform
Cyber risk is a complex problem, but that does not mean that cyber risk can’t be quantified and managed. In today’s complex cyber risk environment, resilient organizations should be able to reduce the likelihood of a successful cyber attack and recover rapidly, to minimize the disruption on customers and business operations.
ROAR is a cybersecurity risk management platform that unifies risk observation, assessment, and remediation. The platform enables risk-based decisions, allowing organizations to clearly visualize, quantify, and communicate their risk posture in the context of business priorities to guide strategic decisions.
To see the Reciprocity ROAR platform in action, schedule a free demo today.