Why is financial cyber risk quantification important?
Cyber incidents are a major risk facing organizations and companies of all sizes and industries. These risks have only increased in the past year, with much of the workforce continuing to work from home due to the COVID-19 pandemic.
In its 10th annual Risk Barometer, Allianz found that cyber incidents ranked third in a list of the most important global business risks for the upcoming year, coming in second behind risks stemming from the pandemic itself. We can expect cyber incidents to increase in frequency and sophistication as cyber criminals continue to leverage the various security lapses that accompany remote workforces.
However, something that has changed recently is how business leaders and boards of directors are viewing cyber risk. While previously seen as an issue solely for security and technology leaders to manage, executives are now pressuring security departments to financially quantify cyber risks facing their organizations.
In fact, a recent survey of 100 senior security professionals found that 70% of respondents have received pressure to produce cyber risk quantification for their business. Further, half of the respondents reported they have a lack of confidence in their ability to communicate and report the financial impacts of cyber risks, with a quarter saying they do not have a cyber risk quantification technology deployed at their company.
Why are executives pressuring CISOs to start financially quantifying cyber risk for their business? This process allows CISOs to identify and rank risk scenarios that are most critical to their enterprise, based on factors such as which attacks would have the biggest financial impact, and how equipped the company is to defend itself against any given attack.
Automated risk quantification makes this process even easier, removing the guesswork out of these decisions and streamlining the process of getting to actionable information. The potential for human error and subjectivity are removed completely from the equation.
Previously, security leaders have relied on theoretical models of risk like the Common Vulnerability Scoring System (CVSS). Even with this system, it can be difficult to prioritize the vulnerabilities that rank highest in terms of severity. This is even more challenging for leaders across the enterprise who may be unfamiliar with this system. Cyber risk quantification provides security leaders with a way to communicate the most pressing cyber threats facing a company that do not rely on a scoring system that is incomprehensible to anyone outside of the security department.
By assigning a dollar value to potential cyber incidents, business leaders have better visibility into the most pressing – and costly – threats facing the enterprise. With this information, the business and security teams can align their efforts and prioritize the largest risks, rather than dedicating resources to lower priority risks.
Teams can focus their efforts on ensuring the business has adequate controls and processes in place to defend against the costlier risks and make additional investments accordingly. It can also make it easier for leaders and boards to justify spending more time or money to proactively defend against certain risks.
For CISOs, cyber risk quantification also provides an easier way to communicate the value of their work to leadership. Security leaders can calculate the return on investment of their tools and teams in the context of risk reduction for the enterprise. This gives leaders better visibility into the risks facing their organizations in terms that are understandable and actionable. Conversely, cyber risk quantification can help to identify any issues with an organization’s existing cybersecurity program and measure improvement over time.
Overall, shifting to this type of risk-led approach for cybersecurity will result in data-driven and actionable insights that will allow leaders across all business departments to understand and act on the most critical cyber risks facing their enterprise.
We know that attacks are going to continue, whether they’re state-sponsored or cyber criminals, and it is critical for an enterprise to have a comprehensive view into your risk landscape. Now is the time for security leaders to adopt cyber risk quantification and more easily demonstrate how cybersecurity organizations are protecting their business operations from disruption and catastrophic harm.