In the past, cyber security had been regarded as an issue that only concerned the security teams, so it was left out of most business processes. However, in recent years, the evolution of technology has allowed many organizations to shift to the cloud and enjoy the benefits it provides. Namely, this move also opened the door for attackers that would want to exploit the vulnerabilities of modern technology, so it’s no secret that cyber attacks are at an all-time high. As a result, executives and boards turned their attention to cyber security and wanted to understand the financial risk of these threats.
In this context, cyber risk quantification is an important process for many organizations, as it provides unique benefits that cannot be substituted by anything similar. It has the ability to attach a dollar value to every cyber risk that a company could face in the future. This provides the clarity that security teams need to explain the threats and their impact on the decision-makers in the enterprise in simpler terms. With this understanding, organizations are able to invest in the right areas to improve their cyber security.
Defining Cyber Risk Quantification
Cyber risk quantification is a process in which an organization analyzes the financial impact of the cyber risks it is exposed to at the moment or the ones it will be exposed to in the near future. Contrary to traditional methods of assessing risks that are based on the likelihood of them happening, quantification focuses on the impact those risks can have on the finances of your company.
The goal of cyber risk quantification is to provide a new outlook on risks that will help you prioritize the remediation process in a way that will minimize financial loss. Some of the main benefits that cyber risk quantification can offer to your organization are the following:
- Better visibility into the most dangerous threats could cause the biggest financial impact on your business.
- Improved prioritization of risks will enable you to focus your efforts and investments on the threats with high priority instead of wasting them on low-rated risks.
- Proper understanding of the risks will allow the security teams to focus on setting the appropriate security controls on the right threats.
- A simplified view of the value of the work of the security team that can be easier to communicate with higher management.
The Main Areas of Cyber Risk Quantification
There are three main pillars that cyber risk quantification is based on:
- Cybersecurity resilience – which can be determined after the organization’s security posture has been deduced. This aspect will allow you to understand the frequency and severity of attacks that your organization is prone to. Namely, this is done by testing the efficiency of your existing security controls. The tests will show the vulnerabilities in your systems that will help establish your security posture.
- Frequency of attacks – that can only be determined by analyzing cyberattacks on a global level. The data needed for this analysis should consist of past events, which are updated on a day-to-day basis. Cybercriminals are always finding new ways and methods to attack, so you need to keep up with their methods. Attacks that were considered infrequent a week ago might have changed frequency, and you need to stay up to date.
- The severity of attacks – can be evaluated based on multiple factors. The financial impact an attack can have on your organization can be judged on its potency. This involves the amount of data that was stolen and the size of the ransom requested. Another input into the severity quantification is the financial loss due to business interruptions and the expenses for data recovery.
To sum it all up, cyber risk quantification aims to evaluate the cyber risks posed to an organization from a financial point of view. The goal of it is to prioritize the threats that can potentially do the biggest financial damage to the business and set appropriate security controls in place to prevent them.
Without cyber risk quantification, it is incredibly hard to determine the potential financial loss in the case of a cyber risk ever being realized, let alone get ready to prevent it. However, through this process, security teams are able to assign a financial value to the cyber risks and cooperate with the executives more easily. It gives them a common language and the visibility needed to improve the decision-making in the organization.