Do you know what the potential financial impact of cybersecurity risks is to your organization?

This question is crucial for businesses aiming to strategically plan and budget their cybersecurity investments. Quantifying cybersecurity risks allows businesses to make more informed decisions when planning and budgeting for their cybersecurity investments. Many organizations rely on software solutions to alert them of cyber risks and often do not conduct a thorough review using a strategic risk management approach. This can make it challenging for executive leadership to fully understand the importance of investing in cybersecurity and prioritizing risk remediation.

Quantifying risks can benefit organizations of all sizes by helping them understand potential financial losses, work with insurance providers to lower premiums, confirm that key risks are covered, and manage risks more effectively. For small to medium-sized organizations that may have limited resources or dedicated teams, quantifying risks can help prioritize the most critical risks and justify necessary investments. Understanding top priorities for risk remediation based on potential financial loss enables organizations to minimize significant risks that could interrupt business operations or cause prolonged delays.

Common roadblocks in addressing cyber risk

Though the benefits are clear, organizations face several challenges in properly quantifying their risks, including:

• Lack of visibility into their cybersecurity maturity
• Limited insight into the evolving threat landscape
• Inadequate resources to support data gathering and analysis
• Lack of correlation between investments and risk mitigation
• Limited expertise in all cybersecurity domains
• Lack of standardization for consistent analysis and reporting

Where to start

The first step toward quantifying your investment and risk mitigation needs is understanding your current cybersecurity maturity and security posture. While there are different approaches to conducting these assessments, some recommended steps are:

• Consider both technical and non-technical risk assessments.
• Determine which assets are critical to the organization and prioritize risk accordingly.
• Using a top-down approach, identify cybersecurity risks at all levels of your organization, taking people, processes, and technology into account.

In conclusion

Cybersecurity risk quantification enables organizations to make informed decisions for strategic planning and budgeting based on potential financial losses from cyber risks. Organizations need appropriate visibility, adequate resources, and an understanding of evolving threats to prioritize risk remediation based on its importance to the organization and potential financial loss.

Despite the challenges, organizations of all sizes and industries can benefit from quantifying cybersecurity risks. This process allows for a greater understanding of potential financial impacts and provides a different angle on risk assessments to help ensure risks are managed strategically and effectively. 

How can CohnReznick help?

CohnReznick’s cybersecurity risk assessments incorporate methodologies for quantifying cybersecurity risks. We use a centralized platform powered by Mastercard to analyze data from past breaches and the current threat landscape, tailored to our clients’ business contexts. This approach helps clients prioritize risks, provides management with visibility into their organization’s risk score, and identifies remediation needs to reduce potential financial losses.

Learn more about our Cyber Risk Quantification services, and contact our team to get started.