Know your collective financial cybersecurity risk

Security and Risk management leaders struggle to make businesses owners recognize cyber events as enterprise-level threats because of inadequate means to communicate cyber risks in a business context. However, the onslaught of cyberattacks during the pandemic has made decision-makers sit up and listen. The acknowledgment of cybersecurity as a business enabler has prompted a global rise in cybersecurity expenditure that is expected to cross $1.75 trillion by 2025.

For C-suite executives and Board members, the biggest challenge is not the amount of money their organization is willing to invest in security, but rather it is the lack of visibility on how well they’re investing it. CISOs, CIOs and security teams need an absolute and real-time metric to show the effectiveness of cybersecurity initiatives undertaken, and this needs to happen in a language that the Board understands - financial impact.

Fear and guesswork drive today’s security strategies/Making Cyber Risk Objective, not Subjective

Today’s cybersecurity strategies are typically speculative and reactionary. Especially in the face of newer and more sophisticated attacks; relying on a ‘detecting’ mindset means businesses will forever be one step behind threat actors, rather than preparing for the cyberattacks of the future.

How secure is the organization?Today,cyber risk needs to be measured in real, quantifiable terms that relate to precise data points and correlate it to the financial impact of a data breach that could be averted with streamlined initiatives and investments. Cyber Risk Quantification (CRQ) makes this an easy conversation to be had. CRQ uses internal and external data points to create a real-time risk value for the enterprise, as well as for every asset in the enterprise. This can be translated to a dollar value that is calibrated for everyone in the business to understand and act on, starting from a security analyst up to the Board members or CEO.

How do risk quantification platforms measure financial risk?

CRQ platforms measure micro-level risks by aggregating signals from cybersecurity products already deployed in the security ecosystem for people, technology, policies, and procedures for first and third parties. These signals are collated through a Bayesian network-based data lake to calculate the macro-level cyber and financial risk of the organization. To generate a financial impact of a specific breach, the platform must consider relevant factors such as the geography of the organization, their industry type, and the kind of data managed/stored are also accounted for. This helps businesses understand their threats.

The platform estimates the severity of financial loss by combining the probability of a specific cyber event and its expected annual loss as the output. The output is the estimated dollar value impact of data breaches for the next twelve months. A Monte Carlo simulation, a technique used to understand the impact of risk and uncertainty in prediction and forecasting models, is used to provide this output with a high confidence.

Using Risk Quantification: the advantages to a CISO

The financial impact of a breach on a corporation is a common language that everyone on the Board understands. They'll want to know how much of this value can be reduced with the right cybersecurity strategies. Rather than discussing why a cybersecurity initiative helps enhance cyber risk posture, a CISO should show by how much the initiative reduces the financial impact of cyber risk.

Cyber risk quantification adds that missing business context to accept the dollar value risk, mitigate it through the correct cybersecurity initiatives, transfer the risks via cyber insurance, or a combination of all three.

The author is Saket Bajoria, Chief Product Officer, Safe Security.