Knowing the Difference
“Cyber Risk Management” and “Cybersecurity” are not interchangeable terms. Rather, these terms describe separate yet related functions within an organization.
Cyber risk management establishes the foundation by which cybersecurity measures can be optimally selected, implemented, and maintained to reduce estimated financial loss potential of cyberattacks.
Today, however, may organizations have not yet established a sound practice of cyber risk management. Year over year, many companies funnel increasing amounts of budget, time, resources, and technologies into cybersecurity. If pressed for a defensible measurement of the efficacy of these cybersecurity investments, the response is typically vague, fraught with subjectivity, and insufficiently substantiated.
One cannot defend cybersecurity investments without first quantifying cyber risk – and quantifying it properly, complete with a translation into financial terms.
Cyber Risk Quantification is Essential to Managing Cyber Risk
Cyber risk management should be instituted as a program within an organization, and no program is can be properly supported unless it has KPIs to baseline and benchmark its success. Quantifying cyber risk should be conducted as comprehensively as possible:
- Take a robust bottom-up data collection approach spanning internal and external factors
- Feed data into well-trained and thoroughly vetted algorithms that tidily summarize cyber risk
- Present cyber risk metrics and their translations into estimated loss potential for executive leadership consumption to guide their decision-making, or cyber risk management
Cyber risk management is an ongoing process, and therefore, the cyber risk quantification exercise should also be performed on a continuous basis to gauge progress toward program goals.
The Journey from Cyber Risk Management to Cybersecurity
In managing cyber risk, leadership evaluates all the factors that contribute to the cyber risk “score,” including consideration of their dependencies, complexities, and the realities of time and financial investment required to remediate. Ultimately, decision-makers determine whether each source of risk should be remediated, transferred via cyber insurance, or – for the time being, at least – accepted. (Note: Risk acceptance is a conscious decision; this is not synonymous with ignoring risk.)
Remediation decisions that are made as a part of the cyber risk management process are what provide the linkage between cyber risk management and cybersecurity.
Armed with deeper insights into which vulnerabilities to prioritize, cybersecurity measures to remediate risk can be tactically managed by security teams in a manner that will yield better business outcomes, and provide a much more effective means of proving the value of the team’s efforts to senior management.
As cybersecurity measures get implemented, the entire organization – from IT to non-technical leadership echelons – can begin to observe more favorable cyber risk scores and reduced financial loss estimates.
Remember, the organization is constantly undergoing change as it innovates its operations, expands or contracts its teams, changes the geographic footprint of its workforce and customers, and so on. The external environment is also constantly evolving. There are both internal and external variables at work that influence an organization’s cyber risk, even as it diligently works to implement remediation solutions. For this reason, the team members who oversee cyber risk management must commit to continuous monitoring of cyber risk posture and reevaluation of which risks to remediate, transfer, and accept.
If you are interested in improving your cyber risk management, or even creating a cyber risk management program from scratch, the Maxxsure team is here to help you get on track for success. Contact us today.