How to Measure Cyber ​​Risk: The Basics of Cyber ​​Risk Quantification

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Organizations today rely more on metrics than ever before. Yet, when it comes to metrics, few are as important as cyber risk. Having the ability to measure cyber risk is essential to making informed security investments and implementing the necessary controls to minimize the risk of a data breach.

Failure to understand the level of risk in the environment leads to dangerous vulnerabilities that can cause millions in damage.

Despite this, most organizations still fail to understand their exposure to risk. Research shows that only 50% of IT managers and 38% of business decision makers believe the C suite fully understands cyber risks.

It's not for lack of trying, either: Gartner reports that security and risk managers are increasingly investing in cyber risk quantification for business decision support, although only 36% report concrete results.

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To some extent, the challenge of quantifying cyber risk is subjective, with organizations identifying a different level of risk based on how they define cyber risk, as well as the methodologies and data signals they use. they use to measure it.

But what exactly is cyber risk?

In simple terms, cyber risk is the level of risk posed to an organization in the event of a cyber attack.

According to the Fair Analysis of Information Risk (FAIR) quantitative risk model, risk management is defined as "the combination of people, policies, processes and technologies that enable an organization to achieve and maintain profitably an acceptable level of loss exposure."

Companies must have the ability to measure this risk not only to ensure the overall security of their environments, but also to ensure that they are not overspending on ineffective controls.

James Turgal, vice president of cyber risk, strategy and board relations at MXDR provider Optiv, stresses that “cyber risk quantification should be a critical part of all actions businesses to understand and measure the risk posed to that business in the event of a cyberattack occurring.

Turgal notes that companies can use cyber assessments set by entities such as NIST to define the most important technology assets, determine the impact a data breach would have on the business, understand the likelihood operations and guarantee an acceptable level of cyber risk. .

Cyber ​​risk measurement frameworks

When it comes to measuring cyber risk, companies can choose from many frameworks and methodologies, including the Fair Analysis of Information Risk (FAIR), the NIST Cybersecurity Framework (