Navigating Cyber Risks: A Closer Look at Assessment Methods

Data and technology reign supreme in our digitally interconnected world. For the seemingly infinite benefits and conveniences this technological revolution has created for individuals and organizations, they are met by the ever-increasing risks posed by cyber threats. 

The need to safeguard against these threats has never been more critical, and organizations regardless of size face a constant challenge in understanding and managing risks related to their data, systems, and networks. Organizations evaluate and deploy a variety of qualitative and quantitative methods to assess these risks depending on their unique needs, measuring potential harm against the cost of implementing additional safeguards.  

 

 

Qualitative Methods to Assess Cyber Risk 

Qualitative methods of assessing cyber risk are use expert insights and subjective analysis to identify and evaluate potential threats. These methods are commonly used when an organization is faced with complex and less tangible risks that are hard to quantify. Here’s a look at a few of these methods: 

• Risk Assessment Frameworks: Imagine a company as a ship navigating treacherous waters. To help it chart its course and arrive at its destination safely, the company uses established frameworks, like the NIST Cybersecurity Framework, ISO 27001, or CIS Controls, that serve as guidebooks. These frameworks provide best practices to help companies set the right course by offering clear directions in an often-choppy sea of cyber threats. 

• Threat Modeling: Think of this as building an elaborate defense strategy for a castle—moats, drawbridges, and unclimbable walls. Companies employ threat modeling to identify and analyze potential threats to their digital kingdom. They create blueprints of potential attacks, pinpointing vulnerabilities, assets at risk, and the potential consequences. This method helps organizations prioritize where to fortify their defenses. 

• Expert Opinions: When you’re sick, you call a doctor. Similarly, companies consult cybersecurity experts, consultants, or their internal security teams for their expertise. These experts assess risks based on industry trends, emerging threats, and their own experiences, helping the organization make informed decisions about risk tolerance. 

• Asset Valuation: Everything you own has value to you, others, or both. How much you value these items determines to what extent you work to protect them. Companies assess the value of their digital assets, like customer data, intellectual property, and financial information. By understanding the worth of these assets, organizations can better determine how critical they are to protect. 

Qualitative methods offer unique benefits, but they have their limitations. As they deal with hard to quantify risks, they often lack well-defined thresholds, risk tolerance levels, and a clear connection to financial impacts. This can make it challenging for organizations to prioritize their cybersecurity efforts effectively. 

 

Quantitative Methods to Assess Cyber Risk 

Quantitative methods of assessing cyber risk rely on mathematical models to calculate the likelihood and impact of cyber risks. These methods are particularly useful when quantifying risks that are more easily measurable, particularly as they relate to financial losses or negative customer impact resulting from a cyberattack. Here’s a look at a few of these methods: 

• Risk Quantification: Think of this as attaching a price tag to potential risks, such as the potential costs of maintenance and repairs when buying a car. Quantitative methods assign numerical values to risks, considering factors like how likely an event is to happen and its potential financial impact.  

• Key Risk Indicators: Imagine a car dashboard displaying speed, fuel, and engine temperature; they tell you important information about your car’s performance and health. Similarly, companies monitor specific metrics, known as Key Risk Indicators, to gauge potential cyber risks. For example, they might track the number of security incidents per month or how quickly they can detect and respond to threats. 

• Cost-Benefit Analysis: Every decision has tradeoffs, such as whether taking a new job with a higher salary is worth the longer commute. Companies weigh the cost of implementing security measures against the potential negative impacts resulting from a security breach. For each risk, they must decide what actions to take based, in part, on whether the added cost is worth the benefit. 

• Insurance Models: Insurance protects our cars, homes, and lives. How much coverage you have depends on a variety of factors, including those both within and beyond your control. Some companies use insurance models to determine the right level of cyber insurance coverage. These models use data and risk calculations to set premiums based on the company's unique risk profile. 

While quantitative methods offer a more data-driven and precise view of cyber risks, they do require access to historical data and expertise in mathematical modeling. They can offer a more precise projection of impacts and risks than qualitative methods, but they are still only projections. 

 

How Companies and Industries Employ These Methods 

The methods an organization employs to assess cyber risks often depend on its size, industry, risk tolerance, and available resources. Here are some real-world examples: 

• Financial Services Companies: Imagine a bank that deals with customers' financial transactions. Banks often use quantitative risk assessment methods to calculate the financial impact of cyberattacks. They're essentially tallying the potential losses resulting from breaches and assessing what level of risk they can tolerate. Additionally, they may employ qualitative methods to assess reputational risks, which can be complex and challenging to quantify. 

• Healthcare Companies: Consider a hospital entrusted with patient data. Healthcare organizations often use qualitative methods to assess risks to patient safety and privacy. This means evaluating the potential harm that patients could face if their data is compromised. They may also use quantitative methods to measure the financial impact of cyberattacks, such as the cost of patient data breaches. 

• Government Agencies: The Department of Homeland Security plays a significant role in our national security. Organizations like the DHS often rely on a combination of qualitative and quantitative risk assessment methods. They use qualitative methods to assess complex risks like threats to national security, which are difficult to quantify. For financial considerations, they employ quantitative methods to calculate the potential economic impacts of cyberattacks. 

• Small Businesses: Smaller businesses, like a local store that has an online shop, often start with qualitative risk assessments, such as identifying potential threats and vulnerabilities. As they grow and gather more data, they may transition to more quantitative methods, like calculating whether the assurance of additional protection against threats is worth the cost of installing additional security measures. 

 

Assessing Cyber Risk at Capitol Tech 

Cyber risks are continually evolving and are a significant threat to organizations regardless of size or industry. Assessing and managing these risks is not a one-size-fits-all approach. While qualitative methods offer insights and context, quantitative methods provide precision and data-driven decision-making. Organizations must tailor their approach to the unique needs and circumstances, often by adopting a comprehensive strategy that blends both qualitative and quantitative methods. 

Capitol Technology University’s degree programs in Cyber and Information Security can prepare you to lead in this evolving cyber landscape by helping organizations evaluate and deploy the various risk assessment strategies that meet their needs and protect their critical digital assets. For more information,  contact our Admissions team at admissions@captechu.edu.