Cybersecurity threats are becoming increasingly difficult for businesses. According to PurpleSec’s 2021 Cybersecurity Trends Report, cybercrime has jumped 600% during the pandemic, increasing the costs incurred by cybercrimes at an astonishing rate.
An effective cyber risk management is essential to protect your organization against cyberattacks. A risk management strategy should include the use of risk quantification methodologies to measure cyber risk and understand the potential financial impact.
Value of Risk Quantification for Security Practitioners
Risk quantification is an integral part of risk management. It is the process of identifying the possible risks that an organization may face and quantifying the potential losses caused by these risks in monetary terms.
CISOs and IT security experts can use risk quantification data to:
Create risk awareness
Risk quantification helps CISOs and leaders raise awareness among stakeholders, team members, or board members. It provides a clear perspective and educates the organization on possible threats. In a risk management plan, each member of the team has a role to play and must be aware of the risks.
Reduce future risks
No organization is immune to cyberattacks; these attacks can hit you when you least expect it. Risk quantification allows you to predict future attacks and take preventive measures to reduce the possibility of such attacks.
The establishment of a risk management framework requires internal communication; educating employees about the risks will increase corporate communication and improve the work culture. Communication is crucial for the long and short term development of an organization and to sustain growth.
Cyber risk quantification determines the types of threats and financial losses from possible cyber attacks. The primary purpose of cyber risk quantification is to help decision makers and security teams make effective and efficient decisions to mitigate risk.
Additionally, organizations can measure risk and financial loss, allowing them to prioritize security measures and challenges. Cyber risk quantification will allow security teams to create effective contingency plans and protocols for various threats and attacks.
FAIR risk quantification
FAIR (Information Risk Factor Analysis) was developed to help organizations and businesses assess information risk and strengthen cybersecurity defense by translating risk into financial terms. It is the only international standard quantitative model framework to offer operational risk and information security. However, many mistakenly believe that the FAIR framework is an alternative to other frameworks like NIST or ISO 31000.
Although not exact, the FAIR Risk Assessment can work hand in hand with other industry standard frameworks. FAIR bridges this security gap by providing a proven, industry-standard risk quantification methodology that can be leveraged alongside these frameworks.
FAIR – A risk management tool
FAIR is valuable to your organization’s security strategy. The model works on the principle of “Loss Event Frequency” as it measures the time lost due to the threat and the consequences of the risk, called “Loss Magnitude”.
Risk management is the feature that distinguishes FAIR from other frameworks. Many organizations use compliance-based frameworks that focus on regulating compliance (laws, rules, policies, regulations) and implementing security protocols for internal procedures.
Organizations often use a compliance-based approach to strengthen their organizational structure and avoid fines, penalties, and lawsuits. However, this strategy allows for gaps in compliance and security over time. Establishing a risk-based approach is handy for real-time identification of security vulnerabilities and growing threats.
A compliance-based approach is not enough to protect an organization’s data. To stay ahead of the changing regulatory landscape and rising cyber threats, security leaders need to move from a compliance-based to a risk-based approach – that’s where FAIR comes in. as a robust risk management tool.
The benefits of using a risk-based approach
A risk-based approach should be a standard method for organizations and provide the following benefits that conventional compliance systems lack.
- Identify hidden risks that often go undetected
- Provide information and details to the board of directors and management stakeholders
- Cybersecurity teams can take steps to mitigate risks and threats
- Improves the efficiency of existing frameworks
- Increases organizational credibility and customer satisfaction
When it comes to a risk-based approach, the ideal choice for organizations is to use the FAIR risk assessment. The FAIR methodology enables organizations to make effective decisions that improve overall performance and safety.
When it comes to cybersecurity, decision makers need to know the frequency and magnitude of the risks involved and the associated financial impact. FAIR can help organizations evolve, prioritize and eliminate threats.
Bridging the Gap Between Security and Business Leaders
Organizations and companies must be transparent in the risk management system. FAIR provides a near-accurate representation of potential threats and financial losses. When organizations have a clear picture of expected scenarios, they can transparently communicate where existing risks lie, make informed decisions, and allocate the appropriate investments needed to maintain security processes.
Additionally, CISOs and executives can inform security and non-security teams of quantified risks and the consequences if they fail to prevent them.
Communication is also necessary for team members; each member of the team should be aware of the nature of the risk and the actions needed to counter a cyberattack. FAIR risk management empowers team members and leaders to make effective decisions and improve communication. With clear and relevant security posture information, technical managers and business leaders can align security as a business function.
The FAIR model has become a necessity for modern cyber defense policies. It benefits organizations to identify and assess risks and gives organizations a new opportunity to improve their communication and transparency. Business leaders, managers, stakeholders, and team members can all be on the same page about growing threats and develop threat response plans.
CyberStrong offers industry risk quantification methods, including FAIR and NIST, to provide insights anyone can get. contact us to learn more about how CyberStrong can streamline your cyber risk management strategy.