In this article:
• Businesses need data-driven Cyber Risk Quantification to shatter the illusion of objectivity in their current risk assessments.
• CRQ can drive better decision making, build organizational resilience and provide a competitive edge.
• This process can even reduce the cost of a breach by nearly 50%.
• Read on for more about how evidence-based Cyber Risk Quantification can drive business growth.
Virtually every business decision is made based on calculated risk (or at least it should be). To make decisions, leaders rely on data—market forecasts, competitive analysis, etc.—to determine how much they can afford to invest in a new product, new equipment, or even a new hire, and what’s at stake if they don’t.
But for most organizations, cyber risk is entirely different. CISOs lie awake at night fretting over the threats they face every day, while the rest of the business is mostly in the dark about just how devastating a single cyber incident can be.
That’s because, in most cases, cyber risk is grossly over-simplified despite being an existential threat.
The illusion of objectivity
Not only do security teams lack the ability to quantify cyber risk in data-driven, business-relevant metrics, the lack of technical expertise outside of IT makes it difficult for the rest of the business to fully grasp it. That leaves security teams relying on color-coded heatmaps and other subjective indicators, which makes the risk seem abstract, theoretical, and even a bit cartoonish.
Unfortunately, heat maps rely on pseudo-quantitative methods to rate risks, benefits, and other factors. While the output can look scientific, the rankings are arbitrary, subjective and deceptive. In fact, there is zero empirical evidence that such rankings are accurate and many fundamental reasons why they aren’t.
These create an illusion of objectivity that falls apart as soon as one starts asking questions: How clear is the differentiation between red and orange risks? Does a consequence rated “4” have twice the impact of one rated “2”? Just because you’ve assigned values to risks doesn’t mean the math adds up.
As a result, the business is essentially flying blind, unaware of how the decisions, investments and changes they make in process, strategy and solutions quantifiably impact their cyber security posture and risk. There’s a tremendous amount of nuance lost between those red, yellow, and green indicators.
In our experience, we have yet to find an organization that is satisfied with the way cyber risk is reported. CISOs and business leaders deserve a better solution. Fortunately, there is one.
CRQ: Putting cyber risk in business terms
Cyber Risk Quantification (CRQ) is a formal process for empirically calculating cyber risk exposure and the potential impact of a cyber security incident in business-relevant terms. There are several frameworks for conducting CRQ, but virtually all consider the same factors, including critical assets, most likely scenarios, threat surface and threat landscape, potential impact on business loss, time and cost involved in mitigation, potential regulatory fines and penalties, and harm to business reputation.
While CRQ reporting is mandated for regulated industries, far too many companies have no CRQ program in place—and those that do still struggle to use it to drive business action. Forrester has called CRQ a “nascent” market but one that “will fundamentally revolutionize the way that security leaders engage with boards and executives to discuss cybersecurity.”
We couldn’t agree more.
Here are eight reasons why CRQ is becoming an essential strategy for both protecting the organization and unleashing sustainable business growth:
1. CRQ brings cyber security on parity with other business risks. By creating a common taxonomy and framework to discuss risk using standard metrics, business leaders can start off on the same page when considering potential options and strategies.
2. CRQ builds organizational resilience. Traditional risk models take a qualitative approach that don’t go far enough and leave organizations exposed. CRQ provides a framework for optimizing resiliency that goes far beyond subjective indicators with dynamic assessments and actionable insights.
3. CRQ can reduce the cost of a breach by nearly 50% according to the IBM-Ponemon 2022 Cost of a Data Breach report. With the average cost of a breach at $4.35M worldwide, that direct savings alone provides substantial capital that can be invested in growth strategies rather than recovery.
4. CRQ can inform capital investment. Every investment—not just those in cyber security—impacts risk. An effective CRQ program can help guide decisions on how to assign risk capital, and how to measure ROI on those investments.
5. CRQ enables calculated risk taking. A zero-risk approach isn’t an option because that means zero action. Businesses must evolve and adapt to grow, which requires accepting a certain amount of risk. CRQ enables you to accurately quantify the risk of any potential move and make better informed decisions.
6. CRQ can help lower cyber-insurance rates. As the frequency and scale of attacks accelerates, cyber security insurance premiums are skyrocketing. CRQ can help organizations accurately define their risk to negotiate lower premiums based on empirical evidence.
7. CRQ is a competitive advantage. Cyber security has become critical business infrastructure, and if your competitors are able to make data-driven decisions, you may get left behind. CRQ is essential to both protecting the organization and capitalizing on strategic opportunities.
8. CRQ enables timely decision making. These days it’s essential to have the insights you need to act quickly to keep pace with change. That’s why CRQ must be an ongoing process: so that business leaders always have real-time analysis at their fingertips. Someday soon, we’ll see CRQ become a fully automated process in which any change in the business environment is automatically reported as a quantifiable risk, and we can conduct on-demand, what-if scenarios to help guide decision-making.
If you’re convinced by these CRQ benefits, here are some key considerations to keep in mind:
Remember that CRQ is about evolving your risk, not being revolutionary. The process and the practices you implement must be done in a measured, incremental manner—not a rip and replace—so that you can understand how each change impacts your risk.
CRQ is as much a technical endeavor as it is an exercise in organizational change. Success is linked directly to securing buy-in and stakeholder investment and how well it’s implemented across the organization. It’s essential to adapt your cultural alongside the engineering.
Choosing a partner is key. While your organization might have pockets of expertise and capacity to conduct CRQ, you’ll likely not have nearly enough. A partner can provide a dedicated team with deep expertise in the risk landscape and mitigation who can get it done, rather than pushing CRQ to the back burner while they address urgent, day-to-day issues.
Be cautious of black box solutions. Many tooling vendors offer what is effectively just Monte Carlo simulations to help predict risk. But the inputs in those simulations are critical—they must be of the right quality and relevance to your business. Make sure your CRQ partner fully understands your threat surface, assets and business objectives, and both of you are clear on the factors to be considered in the CRQ analysis.
As cyber threats become more frequent and more devastating, continuing to fly blind isn’t an option—organizations must shatter their illusions of objectivity with clear, empirical analysis. Conducting CRQ is a strategic exercise that’s linked directly to overall enterprise risk, and solves challenges not just for the CISO, but also every business leader to help them unleash growth across the organization.
NCC Group exists to make the world safer and more secure.
As global experts in cyber security and risk mitigation, NCC Group is trusted by over 14,000 customers worldwide to protect their most critical assets from the ever-changing threat landscape.
Looking for even more reasons to embrace cyber risk quantification?
Learn about our new Rapid CRQ Assessment offering or get in touch with an expert to see how CRQ can help you build a more resilient, agile, and growth-ready organization.