Transform Cybersecurity Decision-Making With Cyber Risk Quantification

By |2024-03-20T04:09:50+00:00March 20th, 2024|0 Comments

As cyberattacks continue rapidly evolving, cybersecurity professionals and business leaders must grapple with increasingly complex — and expensive — incident response. Can cybersecurity risk quantification elevate their decision-making, improving their resiliency to threats?

What Is Cyber Risk Quantification?

Cyber risk quantification is the process of evaluating the potential financial impact of successful cyberattacks on an organization. It relies on various mathematical and probability-based calculations to generate a quantifiable measure of risk. You use data to generate and assign values to previously identified cyber threats, enabling you to categorize them.

This process assesses risk — a helpful approach in an age where emerging threats are multiplying in number rapidly. By considering an attack’s probability, frequency and potential financial impact, you determine how to best prioritize threats.

Have your organization’s board members ever asked where they need to invest to get a positive return on investment? Has your team leader wondered whether they should increase their cybersecurity insurance policy’s coverage? Cyber risk quantification can answer common questions like these because it provides in-depth financial details.

Common Cyber Risk Quantification Models

Depending on your priorities and data availability, there are various cyber risk quantification models you can use.

NIST SP 800-30

The NIST SP 800-30 model follows the National Institute of Standards and Technology’s cybersecurity framework. This is a part of its general risk management process, so it provides a comprehensive overview.

Monte Carlo Simulation

The Monte Carlo simulation is a mathematical model for predicting the potential outcomes of an uncertain event. It is used when randomness is a factor. In other words, it’s ideal if you need to calculate risk but lack enough input data.

Factor Analysis of Information Risk

Factor analysis of information risk (FAIR) uses loss frequency and magnitude to determine overall risk. You can use it to gain a comprehensive understanding by analyzing the potential impacts of cyber threats.

FAIR is one of the most common models because its clearly defined terms and simple structure translate well in a boardroom setting. Considering that 44% of cybersecurity professionals say the lack of business buy-in has been their biggest implementation obstacle, using this model to appeal to the board is a sound strategy.

Aggregate Exceedance Probability

The aggregate exceedance probability (AEP) model determines the probability that the sum of all losses in a given period exceeds a certain amount. Determining likelihood in this context is ideal for determining whether or not you need to revisit your cybersecurity insurance coverage.

How Does Cyber Risk Quantification Benefit Businesses?

Cybersecurity spending is growing more costly every year. Globally, it totaled over $71 billion in 2022, an increase of $13.4 billion from the previous year. Budgets are limited — boards won’t keep approving increases without sufficient proof they’ll have a positive return on investment and be good for business.

One primary benefit of cyber risk quantification you is its precise, data-driven assessment of cyber threats’ potential financial impact. With this objective overview, you can secure a better buy-in from the board.

If you use this approach to assign monetary values to cyber threats, you won’t have to rely on technical jargon to highlight the importance of your plea when presenting your case for a budget increase. Instead, you can show the board an easily digestible report they’ll have no issue understanding — you can provide them with financial details.

You can even use cyber risk quantification to demonstrate the effectiveness of your current cybersecurity strategy to the board to secure funding. They’ll be more willing to invest if your team can prove it has a history of achieving a positive return on investment.

Cyber risk quantification has benefits beyond helping your team secure funding and appealing to stakeholders. The most important is it increases your resilience to relevant cyber threats. Too many businesses make the mistake of relying on generalized industry data when business-specific metrics are much more nuanced, accurate and actionable.

If your organization struggles with decision-making or your cybersecurity team needs a better buy-in from the board, you should consider this risk assessment strategy. Implementing it is a wise choice for many in an ever-evolving threat landscape with increasingly sophisticated cyber threats, expanding attack surfaces and continuously rising cyberattack frequency.

6 Tips for Implementing Cyber Risk Quantification

If you implement cyber risk quantification with the best practices in mind, you can achieve better business outcomes.

1.    Identify all Information Assets

A good rule of thumb before beginning implementation is to develop a comprehensive profile of your organization’s information assets. You should categorize it by location, sensitivity level and risk of compromise. When you know what’s at stake, you better understand what cyber threats to prioritize.

2.    Collect Business-Specific Data

You can only build a data-driven strategy if you have relevant metrics. While models like the Monte Carlo simulation are useful when uncertainty is involved, collecting business-specific details is the only way to understand the actual severity and frequency of cyber threats.

3.    Rank Assets Based on Value

Once you determine which cyber threats are most likely to impact your organization, you should determine which of your information assets are most valuable to them. This strategy can help you decide where your priorities lie.

4.    Consider Every Possible Threat

When determining the likelihood of threats, consider every possibility. Consider how drastically the threat landscape has evolved in recent years — preparing for the unexpected can pay off. You can improve your long-term resilience and quantification’s impactfulness when you prepare your organization for multiple potential scenarios.

5.    Stagger Implementation

Although using cyber risk quantification to inform your overall cybersecurity strategy is tempting, staggered implementation often leads to better business outcomes. Consider using it to determine which cyber threats pose the most significant risk and then prioritize them.

6.    Consider Indirect Losses

You can’t forget to include indirect losses when determining the potential financial impact of cyber threats — mainly because they can strengthen a case for additional investments. The worse the potential impact, the more likely the board is to approve funds to prevent it. Ensure you consider the monetary implications of liability, compliance and reputation issues.

Cyber Risk Quantification Can Strengthen Your Resiliency

Cyber risk quantification can elevate your decision-making, making your organization more resilient against cyber threats. With strategic implementation, you have a better chance of achieving better business outcomes and securing more funding from the board.

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About the Author:

Zac Amos is the Features Editor at the tech magazine ReHack, where he covers cybersecurity and IT. When he’s not writing, you can find him reading up on the latest security trends. For more of his work, follow him on Twitter or LinkedIn.

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