Defining Cyber Risk Quantification
Cyber Risk Quantification is the process of calculating risk exposure and its potential financial impact to an organization in business-relevant terms. Cyber Risk Quantification arose as a way for organizations to drive alignment between security strategy and business objectives. This has helped shift conversations around cyber security posture from the data center to the board room, enabling better cyber risk decision making at the executive level.
What are the benefits of Cyber Risk Quantification?
Quantifying your cyber risk can have many benefits:
- Resource and budget allocation
- Risk prioritization
- Improved communication and confidence between security and executive leaders
- Ability to track the effectiveness of cyber security programs
Using Cyber Risk Quantification, your organization will be able to answer questions like:
- What is my organization’s expected financial loss from cyber-attacks?
- Are my organization’s security investments adequate?
- What does my organization need to do differently to reduce its cyber risk?
- Which risks pose the biggest financial impact to my organization?
What are some of the challenges for quantifying your cyber risk?
As important as cyber risk quantification is to organizations, it can be challenging to calculate risk because of the following:
Data ≠ Visibility:
Your organization may have dozens of tools that generate data; however, it is difficult and time-consuming to sift through this data to find indicators of risk. Moreover, organizations continue to struggle with gaps in asset inventory, restricting security leaders from accurately assessing their cyber risks and vulnerabilities and understanding the effectiveness of their security tools. Without proper data, organizations don’t have a way to analyze the types of attacks, their frequency and the severity of their impact.
Can’t Calculate Risk:
It can be difficult to unify data into a common risk model. Tools have different formats and semantics for the same attributes of assets or users, and will often surface contradictory information. Different stakeholders also speak using different terminology, and it can be challenging to reconcile them to a commonly understood risk metric.
New vulnerabilities and threats emerge at a very rapid rate, making it difficult to quickly identify, prioritize and remediate risk items. The objective of cyber security is to stay ahead of the adversary, but a lack of real-time information makes it difficult for security teams to streamline processes that protect the organization from threats. Without automatic and continuous visibility of the attack surface and emerging security issues, organizations have difficulty remediating risk quickly and effectively.
How do you calculate cyber risk in monetary terms?
Cyber Risk Quantification allows you to quantify cyber risk in monetary terms so that your line of business leaders, CFO, CEO and board can appreciate your organization’s cyber risk in dollars (and other currencies). Calculating cyber risk in monetary terms provides a common language that you and your leadership can use to prioritize projects and spending, and track the effectiveness of your overall cybersecurity program.
A meaningful way to calculate cyber risk is by determining the expected loss or business impact resulting from a cyberattack or a cyber breach. To obtain a quantifiable measure of risk, underlying breach risk is calculated on a per asset and per vulnerability basis, breach risk = breach likelihood x breach impact. Breach risk considers five critical factors. The first four factors are used to calculate breach likelihood: vulnerability severity, threat level, asset exposure and security controls. The fifth factor, business criticality, is used to calculate breach impact and incorporates four impact cost categories: detection and escalation costs, notification costs, post breach response costs, and lost business cost. Specialized machine learning and automation should be used to quantify both the likelihood and the impact of a potential breach, and remove complex and error prone tasks, and quantify your enterprise’s cyber risk in dollars (or other currencies).
Cyber risk calculation should account for the vast majority of the attack surface which is only possible with automation and AI as an attack surface for a large enterprise can be massive due to the number of attack vectors and assets. In addition, the attack surface expands as an organization grows. The knowledge gained from understanding an attack surface not only ensures a more accurate risk score, it also provides security teams with the detailed remediation guidance they need to reduce risk.
The risk calculation should also understand the business significance of each asset as it is an important variable in determining breach impact. For example, your breach impact is significantly higher for core servers containing sensitive data than for personal smartphones sequestered on your guest network. An attack on your company’s source code repositories is likely to have a greater impact than the guest sign-in kiosks in your building lobby. While assessing business criticality of an asset, you need to consider both inherent (e.g., asset category, business unit) and contextual properties of the asset (e.g., roles, applications, user privilege, and interaction with other assets). A cyber risk quantification solution with integrated asset inventory powered by automation and AI reduces errors and costs.
How should cyber risk be presented to stakeholders in a meaningful way?
Stakeholders should be able to view customizable business reports through real-time risk dashboards updated based on changes to your cybersecurity posture using the latest asset information and vulnerability risk data. Trend reports should be developed to allow leadership to monitor breach risk over time – over 90 days, 6 months, year-over-year or any custom period – and help them understand if the organization is on track to meet its risk goals. Stakeholders should also be able to view cyber risk by business units, sites, risk owners, assets, attack vectors and by specific CVEs – all presented in financial terms. Leadership can easily see which business units or business processes are contributing the most risk to the organization.
How can cyber risk quantification be used to justify security investments?
A more quantitative approach to cyber risk calculation helps organizations rationalize their cybersecurity budgets and investments. It can be challenging for security leaders to track the effectiveness of their security program and defend the rising cost of cyber security initiatives. Cyber Risk Quantification can be used to calculate the change in risk exposure over how the investment in security controls impacts your cyber risk in monetary terms. For example, you can show how the mitigating effects of endpoint security controls reduce the quantified level of breach risk, thereby demonstrating the ROI of your endpoint security investments. Using this approach, you’re able to demonstrate the value of your overall cybersecurity program, and justify current and future security investments.
With Cyber Risk Quantification, organizations can calculate cyber risk and leverage it to address challenges around cyber risk prioritization and to communicate risk exposure in a language that is appreciated by executive leadership and the board. Cyber Risk Quantification enables organizations to embrace their cyber security posture through a financial lens, justify security investments, improve communication across key stakeholders and make better decisions related to mitigation efforts and security investments based on financial impact.