Blog Post
January 10, 2024
In the cyber age, data has become nearly as valuable as oil. While this market shift offers many new learning and growth opportunities for professionals across industries, the immeasurable amount of data is often quite overwhelming to non-analysts, leaving them feeling more lost than when they began their inquiries.
This situation often rings true for cybersecurity leaders tasked with protecting an organization's digital assets against attacks and increasingly malicious actors. The ominous risk landscape demands that Chief Information Security Officers (CISOs) leverage the available data in a structured way to take a more business-friendly approach to mitigate vulnerabilities.
Nowadays, there is a wholesale dependency on technology in both the public and private sectors. Coupled with the interconnectedness of these entities based on third-party service providers, the scale of potential damage an event might cause could be catastrophic for the entire economy. This level of risk necessitates the need for high-level executives to collaborate with CISOs and understand the exact vulnerabilities their organization faces.
Moreover, due to volatile economic growth, the C-suite is demanding that their CISOs do more with their already limited resources, necessitating this emergence even more, as cybersecurity leaders need to know which initiatives to prioritize according to the broader business goals. Finally, as global cybersecurity regulations, such as NIS2 and the SEC’s latest ruling, continue to be enacted, it’s evident that the CISO must work in harmony with key executive stakeholders.
Indeed, creating a truly cyber resilient company culture demands more than the efforts of a single department. It requires a full-scale, collaborative approach. Enter comprehensive, financial cyber risk quantification (CRQ) models: sophisticated tools that transcend conventional risk assessments by revealing the severity and likelihood of potential cyber attacks.
On-demand CRQ solutions offer a nuanced understanding of an organization's cyber risk. The insights they reveal are far from surface level; instead, they offer insights into the precise likelihood of event occurrence and their potential financial consequences. They also capture the higher-impact, low-probability tail events and offer data-driven recommendations for cost-effective remediation.
Still, the true power of CRQ models is not that they can provide an abundance of data but rather that the data provided can be utilized within a broader business context. By translating risk into a language board members and other C-suite executives are deeply familiar with, CRQ solutions shift cybersecurity up to the highest levels of the organization.
The financial insights and event probabilities offer executive stakeholders critical details that can be transformed into data-driven plans aligned with the overarching business strategy. Worldwide, CISOs are harnessing the power of the CRQ to bring cybersecurity into the boardroom, integrate it within the company DNA, and create high-level cyber resilience programs that are conferred upon at the top of the organization.
When evaluating the immense amount of data CISOs have access to, it’s vital for them to first establish a clear understanding of the problems or questions the business wants to address. To gain this crucial knowledge, these cyber leaders must be in constant communication with their colleagues, C-suite executives, and board members. Together, they can discern how specific cybersecurity initiatives will bring the organization closer to its goal.
This process ensures that cybersecurity is embedded within the broader business framework. For example, if the objective is to increase profits by 15%, CISOs can explore the available data to develop strategies that will reduce cyber costs while maintaining a resilient system. The extra savings can then be invested in marketing programs that allow the company to reach new customers. The cyber department is thus framed as a business enabler rather than a drain.
By bringing cybersecurity to the decision-makers and budget approvers, CISOs are effectively employing a Shift Up Strategy; they are using the available data to integrate a historically siloed department into higher-level strategy discussions. In doing so, organizations can more optimally allocate resources and prepare for a risky future that requires a team effort to remain resilient.
The most common obstacle hindering and even preventing organizations from taking a higher-level Shift Up mindset when it comes to cybersecurity is the technical language. Cybersecurity has traditionally been very niche and was thus difficult to translate to executives who lacked the relevant expertise.
The best approach early cybersecurity leaders could take was to communicate that certain risks and initiatives had a "high," "medium," or "low" priority but could not provide the data to justify their assessments. Using only these subjective terms, it became difficult to measure success, determine ROI, and discuss initiatives within a broader business framework.
However, as the CISO role evolved to encompass greater leadership responsibilities, these challenges could no longer be ignored. There became an increasing market demand for tools that could bridge the gap between cybersecurity and executive strategy and facilitate the alignment between cybersecurity investments and overall organizational goals.
Consequently, cyber risk quantification (CRQ) emerged as a solution to this modern-day cyber risk appetite, supporting CISOs in their journey into the boardroom and high-level meetings. CRQ platforms, like Kovrr's, take enormous amounts of cyber data and present it in an easily comprehensible way. Risk insights are thereby translated into broader business terms that non-technical executives are much more familiar with, like business impact, allowing them to see that cybersecurity initiatives can actually contribute to organizational goals.
Whether it's minimizing potential financial loss, establishing more robust initiatives to protect specific data records, or ensuring operational continuity in case of an event, a CRQ solution can leverage the organization's data to address these objectives.
One of the most urgent challenges CISOs face today is developing a data-driven risk mitigation plan. With threat actors attempting to penetrate organizations from every potential attack vector, knowing where to invest resources first or how much to allocate is difficult to discern. However, CRQ models enable these cyber leaders and other relevant stakeholders to identify the areas most vulnerable to risk quickly.
Examining risk according to specific business scenarios, cybersecurity teams can identify which event they are most likely to experience in combination with its magnitude. If there is a high likelihood of an event occurring that will result in a severe financial loss, then mitigation efforts can be focused to minimize that specific threat.
For example, as demonstrated in Figure 1, the assessed organization is expected to suffer a loss of $3.27 million on account of a business interruption in the upcoming year, which amounts to 33% of its overall expected loss. As it's the event type that results in the greatest amount of potential financial damage, organizations would no doubt choose to prioritize an action plan that specifically attempts to alleviate the impact of an interruption.
Of course, CISOs should not ignore a potential ransomware incident but instead focus on mitigating their risk to that type of event only after investing in protections against business interruptions. Plus, due to the interconnectedness of cyber vulnerabilities, any initiative would help to secure the organization against both events, at least to a certain extent.
Another crucial insight CRQ platforms can reveal is a breakdown of the Average Annual Loss according to the attack vector. According to Figure 1, out of the $9.82 million the organization is expected to lose that year due to a cyber incident, nearly a fourth of that loss will be a direct result of human error. Consequently, CISOs may decide it’s worth it to invest in training programs for employees that promote great cybersecurity awareness and vigilance.
A CRQ can also illuminate which business assets have the greatest potential to cause significant damage to the business in the case of an event, allowing for another approach to prioritization. For instance, if the company discovers that “Cloud Asset Group DATA” is the business unit that, if compromised, would yield the greatest loss in revenue, as is the case in Figure 2, then stakeholders might agree it’s worth setting up additional protective measures.
The loss exceedance curve is similarly helpful for CISOs attempting to bring cybersecurity awareness to other executives and encourage collaboration. This loss curve is a graphical output from the CRQ that illustrates the potential loss per various cyber events according to their likelihood. As in Figure 3, the x-axis demonstrates the range of potential losses, while the y-axis indicates the probability of those losses occurring.
The graph helps organizations comprehend the full spectrum of potential risks they face, illuminating precisely which events are most likely to cause the highest amount of damage. Moreover, the curve reveals those high-impact, low-likelihood tail events that have the potential to upset business operations permanently.
Ultimately, proper cyber initiative prioritization is only achieved when considered within the broader business context. What an organization determines to be its most pressing cyber risk depends on its overall tolerance levels, risk appetite, and other market influences. For the CISO to execute a strategy that aligns with higher-level objectives, cybersecurity must be shifted up.
A financial CRQ solution organizes the data in such a way that enables security leaders to collaborate with upper management, translating cyber risk into terms that easily integrate into executive discussions. Leveraging the insights provided by CRQ models, all business leaders, even those without a statistical or cybersecurity background, can work together to decide how to best allocate funds according to cyber risk.
In March 2024, Kovrr, along with Microsoft, ISS-Corporate, Valence, and Silverfox, hosted the Shift Up Summit to help key industry professionals learn more about elevating cyber risk management to the C-suite, board room, and beyond. Several CISOs from global enterprises shared their experiences, and there was in-depth discussion and practical tips shared on how to best facilitate this necessary cybersecurity transition.
While the event has passed, the presentation slides are available, offering you insights on other ways to incorporate a Shift Up Strategy within an organizational framework.
Unfortunately, cyber attackers continue to find creative ways to take advantage of system vulnerabilities, gaining access to highly sensitive data that has the potential to cause extreme public distress and financial loss when exfiltrated. This inescapable market reality demands that organizational leaders take a much more proactive approach to cybersecurity and incorporate it into higher-level discussions.
CRQ models fundamentally facilitate Shift Up strategies, ensuring that cybersecurity initiatives serve to bolster greater business resilience. With organizations facing budget cuts, cyber risk mitigation prioritization is going to be a crucial component of long-term success. However, it is by far not the only way CRQ helps CISOs shift the discussion up to the executive meeting room.
Part 2 and Part 3 of this Shift Up blog offer more examples of how CRQ solutions aid CISOs in communicating with, convincing, and uniting executive stakeholders so they can strategically allocate resources to maximize a business’s cyber resilience.
To learn more about this revolutionary approach to cybersecurity management and how you can start implementing it, get in touch with Kovrr’s cyber experts today.
Kovrr financially quantifies cyber risk on demand. Our technology enables decision makers to seamlessly drive actionable cyber risk management decisions.
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