Organizations are constantly faced with new tactics from cybercriminals looking to compromise their most valuable assets. However, despite advances in technology, many security leaders still rely on subjective terms such as low, medium, and high to communicate and manage cyber risk. These vague terms do not convey the detail and insight needed to produce actionable results that accurately identify, measure, manage, and communicate cyber risk. As a result, executives and board members remain uninformed and unprepared to effectively manage their organization’s risks.
At the same time, management is feeling increasing pressure to improve. cyber security With the introduction of newly adopted U.S. Securities and Exchange Commission (SEC) regulations, the program requires publicly traded companies to promptly disclose critical information regarding cyber-attacks and their own cybersecurity. crisis managementStrategy and Governance.
Cyber risk quantification (CRQ) has emerged as the most effective way to maximize cyber risk management programs by translating cyber risk into specific financial impact. According to Forrester Research“CRQ fundamentally changes the way security leaders work with boards and executives to discuss cybersecurity.”
Reporting cyber risks to management and the board of directors
News headlines about cyberattacks and zero-day vulnerability exploits have become the topics of typical boardroom conversations. In fact, cyber risk has become one of the top five risks facing organizations. In today’s world, it is imperative that security leaders communicate cyber risks to the board in a clear, concise, and understandable manner. Cybersecurity reports often contain too much technical detail, preventing executives from making informed decisions and accurately assessing the cybersecurity risk landscape. This can lead to confusion and subjective decision-making.
By operationalizing CRQ, security leaders can provide executive-level reporting that communicates the financial impact of cyberattacks targeting critical business assets. This reduces production and costs associated with business interruptions, system outages, and recovery.
Simply put, cyber risk is a business risk and needs to be communicated in business terms. Using the results of a CRQ program, leaders can drive collaboration with boards and executives to improve overall risk reduction strategies and investments.
Optimize security spend
Security administrators are under pressure to increase protection and reduce risk in the most cost-effective manner given economic constraints and limited budgets. However, traditional decision-making methods often rely on subjective information, making it difficult to objectively justify previous or future security investments. Operationalizing CRQ adds objectivity to the decision-making process. This allows organizations to optimize investments in cybersecurity programs and tools by prioritizing spending based on financial risk mitigation and maximizing return on investment (ROI).
Without first quantifying risk in the context of the current security management posture as a baseline, organizations cannot accurately quantify the effectiveness of their security efforts or make decisions about their next investments. By understanding an organization’s exposure to financial risk, security leaders can focus on areas with the most significant risk reduction opportunities and prioritize security initiatives that are business-aligned and address the most important risks facing the business. can be better mitigated.
Developing an enterprise risk program
To provide decision makers with an organization-wide risk profile, cyber risk must be fully integrated into the overall enterprise risk management (ERM) program. However, this is only possible by understanding the financial impact of cyber threats so that organizations can align risk mitigation efforts with business objectives and strengthen resilience across the organization.
Historically, many organizations have developed independent risk management procedures, such as ERM, cybersecurity risk, operational risk, compliance, and IT risk. CRQ is becoming a best practice among leading organizations for developing and operating effective risk management programs, reviewing risk scoring, and integrating ERM procedures. Leading organizations that have leveraged CRQ to improve their management processes have developed a single, unified operating model for risk management. This enables better analytics to identify and track trends across business units and functional areas, as well as systemic risks to the organization.
This requires a new approach to thinking about risk management that incorporates several risk management functions, but results in standardized, consistent, and well-understood risk identification, analysis, and The reporting process is realized. CRQ provides organizations with a single definition of risk and removes uncertainty about how to report risk to management and the board of directors. By reporting risks in terms of business impact and financial exposure, CRQ eliminates the subjective interpretation that relies on nominal scales and color codes.
As one chief risk officer recently stated: By using a single risk management assessment process, you can quickly identify potential impacts and, more importantly, leverage proven mitigation approaches to address those risks. Masu. ”
As companies continue to mature their cyber risk capabilities by implementing CRQ, they should consider incorporating CRQ into other risk functions and work toward implementing an integrated risk management operating model.
Start quantifying your cyber risk
Whether you’re trying to stay ahead of regulations, respond to cyber events, or be proactive, CRQ helps organizations improve cybersecurity reporting, optimize budgets, and improve risk-based It helps you create a security roadmap, prioritize vulnerabilities, and strengthen your ERM. By doing so, security leaders can help executives and board members make informed and financially responsible decisions about risk.
Organizations can take simple steps to advance this effort. We recommend starting small, choosing one or two use cases that best align with your organization’s security goals, and integrating her CRQs into business processes that produce actionable results.
For more information, please contact Randall Spusta ([email protected]) IBM or Cary Wise ([email protected]) ThreatConnect can help your organization operationalize its CRQ.
look at this On-demand webinar Let’s explore these real-world CRQ use cases in detail.