What is Cyber Risk Modeling?
As cyber security threats proliferate, cyber risk conversations are no longer limited to the Security Operations Center (SOC); they command the attention of the C-suite and the boardroom.
Ultimately, cyber-crime is a significant and prominent issue. The average cost of a data breach in the U.S. has soared to nearly $9.44 million this year. Since 2018, cyber insurance carriers report that incident-related claims increased by an astonishing 486%, the majority being ransomware-related. Experts predict that these trends will continue.
Every business is unique and senior executives and board members need to quantify risk as it pertains to their organization – in a non-technical way. Only then can they make informed decisions about risk management, cyber risk mitigation, and risk transfer.
Cyber security risk modeling can help with this complex task by reshaping the conversation around cyber risk in business terms.
Let’s look at what cyber security risk modeling is, how you can utilize it, and the game-changing insights it provides.
What is cyber security risk modeling?
Cyber security risk modeling is the task of creating a variety of risk scenarios, assessing the severity of each, and quantifying the potential outcome if any scenario is realized – in a language that makes sense to your business.
Cyber risk modeling should not be confused with threat modeling. Threat model frameworks help identify cyber threats and vulnerabilities and inform and prioritize mitigation efforts. On the other hand, cyber risk modeling is an efficient and repeatable means of quantifying the likelihood of a cyber-attack. With this insight, your business can make robust decisions about where to focus investment for the greatest ROI.
An example of cyber security risk modeling
A significant example of cyber security risk modeling is measuring cyber risk in financial terms instead of business terms.
By establishing a universal understanding of cyber risk across your organization you can develop a more mature cybersecurity program that leads to more meaningful conversations on the business impact of different cyber scenarios and cybersecurity investments.
This analysis is not too different from the process of quantifying risk in a financial portfolio. For example, traders and portfolio managers use risk models to analyze and anticipate the impact of future events on performance. This allows them to make preemptive decisions about where to invest funds.
A data-driven approach to understand risk exposure
Of course, any model is only as good as the data inputs and assumptions that go into it. The data must be current and accurately reflect the entire risk landscape. It’s an overwhelming task for any security team.
Digital ecosystems are expanding into the cloud and across business units and subsidiaries which increases your attack surface and associated risks. A significant amount of resources would be required to pinpoint every digital asset, evaluate the risk vulnerability, and estimate the financial implications of a potential breach.
Bitsight’s cyber security risk modeling technology doesn’t require outside consultants or long data collection processes. Your organization can develop these insights with the resources you currently have, without requiring significant data input from users or engaging external risk analysts.
Bitsight uses data derived from real-world cyber events. We blend this data with information about the security posture of your organization’s digital assets to quantify financial risk.
The combined set of metrics delivers actionable analysis of cyber risk exposure across your business units, subsidiaries, and even M&A targets. And because no two risk scenarios are the same, you can simulate hundreds of thousands of events during your threat modeling process – such as ransomware, supply chain attacks, and more – and view the financial impact of each. You can also use these insights to diagnose the underlying vulnerabilities that impact financial exposure and inform what actions will deliver the greatest cyber risk reduction.
Because risk is constantly evolving, the financial cyber risk quantification analysis is available on-demand and is easily repeatable so that you can measure risk exposure over time.
Establish a common language around cyber risk
Bitsight’s cyber security financial quantification models also change the conversation about cyber security at an organizational level by analyzing different loss scenarios – bridging the gap between the SOC and business leaders.
Transforming the technical side of cyber security into financial language, you can guide discussions around cyber risk management. Your team can prioritize and justify new technology investments more effectively. Additionally, calculating the return on investment (ROI) of these investments over time becomes simpler as you can assess how your financial risk fluctuates due to enhancements in your organization's security stance.
In the end, a deeper comprehension of cyber risk enhances the capability of your board of directors and organizational leadership to provide improved and more secure business results for your investors, business associates, and clients.