A data breach is attempted every 40 seconds. Ransomware attacks increase at a rate of 400% year over year. It’s no wonder every organization has to take the cost of a data breach seriously. According to a Study Conducted by Ponemon Institute, the global average cost of a data breach is 3.83 million USD, but the average cost of a data breach in the United States has hit an all-time peak of 8.64 million USD.

Quantifying cyber risk in financial terms empowers cyber security leaders to communicate with key stakeholders more effectively and efficiently. It translates to the Board the importance of assessing and forecasting the cost of a data breach. Despite the rapid growth of cybercrime, the ability to identify and quantify risk provides greater confidence to make decisions.

Nowadays, customers disclose personal information with confidence that the enterprise will protect the data. But that’s not always the case. Data breaches not only cost millions for organizations in terms of lost opportunities, but they also impact customer loyalty and retention.

If CISOs can protect customers’ personal information, they’ll be taking a huge step towards earning customer trust and long-term loyalty. It’s clear that every organization needs a modern approach to the ever-increasing sophistication of cyber adversaries. Cyber Risk Quantification (CRQ) supports evaluating the impact of data breaches through a business value lens.

This article delves into the common challenges executives face while estimating the potential cost of a data breach, and how a CRQ Platform can help mitigate them.

Global Average Cost of a Data Breach in 2021

It’s no secret that the increase of data breaches year-over-year correlates with the growth of our digital commerce and society. It’s also no secret that security leaders are desperate to protect their organizations, especially with the high price of breaches on average. An IBM study on The Cost of a Data Breach estimated real-time data breaches of 100,000 records of over 500 organizations globally. The report showed that data breaches had significant financial repercussions for businesses: 

The average cost of a breach, for breaches between 50 million and 65 million records, was $401 million.

  1. Worldwide, the average total cost of a breach was $4.24 million
  2. The average total cost of a data breach increased by a record margin in seven years  (A 9.8% increase on the previous year which was $3.86 million).
  3. The average total cost of a data breach in the United States was $9.05 million, making it the most adversely affected nation globally.
  4. The average time to restrict a data breach was 287 days. A breach occurring on January 1 that took 287 days to identify and restrict, wouldn’t be restricted until October 14th.
  5. The average cost of a mega breach, for breaches between 50 million and 65 million records, was $401 million.
  6. Every day 230,000 new malware samples are introduced and this is predicted to only keep growing. 
  7. 34% of businesses hit with malware took a week or more to regain access to their data.

With numbers like that, CISOs and security leaders can feel the room getting smaller when they are tasked with protecting the entire organization from the top down. Yet, it’s impossible to understand the potential risks and likelihood of a breach, while not knowing exactly what’s inside of their security stack. Security leaders need a better way to understand their environment to clearly communicate the risk-mitigation value of their security investments to stakeholders. That’s where Cyber Risk Quantification comes in.

Cyber Risk Quantification: a starting point to estimate the cost of a data breach

The lack of an updated, comprehensive real-time picture of an organization’s security footprint makes accurately estimating the likelihood or cost of a potential data breach impossible. A big hindrance to cybersecurity tool investment is understanding what the current security environment needs – where the gaps and overlaps exist. Many CISOs and security leaders often work with inefficient manual systems for tracking their current tools, processes, and services. This is where Cyber Risk Quantification tools can add immense value, and help security teams looking to gain control and full oversight into their security ecosystem:

  1. Empowers CISOs and CIOs to become more strategic in their cyber risk decision-making by integrating the financial impact of risk management, mitigation, and control. It allows them to build a strong business case to present to key stakeholders. 
  2. Provides information security leaders with a precise way to communicate the most impacting cyber threats facing a company that does not rely on a system that is incomprehensible to anyone outside the security department. 
  3. Key decision-makers can have better visibility into the most detrimental and expensive threats facing the enterprise.
  4. Business and security teams can align their efforts and prioritize the most important risks rather than directing resources to lower-priority risks.
  5.  Cyber security teams can concentrate their efforts on ensuring the business has enough controls and processes to defend against expensive risks and make additional investments if needed.  
  6. Provides an easier way for Chief Information Security Officers (CISOs) to communicate and collaborate the value of their work to leadership.

Clearly, CRQ tools can present a better, more reliable starting place for estimating the cost of a data breach, especially when it comes to protecting the overall organizational infrastructure and data assets. But as with any security investment, the road to successful implementation and true ROI starts with knowing your strategy and plan. There are steps that need to happen before implementing a CRQ solution. 

A “before the breach” security snapshot: getting started with Cyber Risk Quantification

As companies continue growing and driving efficiency, migrating to cloud storage and remote access, outsourcing, and working with vendors increase their risk exposure. Cyber Risk Quantification supports companies addressing, preparing for, and mitigating cyber risk. While it may feel immense to navigate, especially in the beginning, the following tips can help CRQ’s implementation go smoothly and safely.  

  1. Complete a threat assessment to address applications and databases open to risk; assess how a risk event might impact your organization; and quantify those financial, operational, and reputational impacts.
  2. Determine the organization’s risk appetite; establish a framework to rate those risks; and communicate to every key stakeholder your plans to prioritize risks. 
  3. Invest in cyber risk technology to clarify risk reporting and compliance; and support transparency by providing a single, enterprise-wide view of risk.  
  4. Conduct up-to-date, ongoing training to keep ahead of technology and legislative, regulatory, and requirement changes. 

[Read Now] “How to Perform a Cybersecurity Gap Analysis”

The least expensive data breach is one that never happens.

Today’s cybersecurity leaders are under tremendous pressure to not only protect and defend against breaches but at the same provide cost-effective ROI-driven cybersecurity solutions. It’s no easy task. At the same time, it’s not an impossible feat with the right tools and strategy. 

Most security leaders don’t know exactly what’s hidden in their stack – gaps, overlaps, and opportunities. Wouldn’t it be nice to have a full 360-degree view of your entire security stack? RedMonocle’s intuitive Cyber Risk Quantification platform reveals unseen risks in your stack that can affect business objectives, and builds a clear roadmap to close them. How? By mapping over 950 NIST 800-53 controls and control enhancements to 17 core Business Indices, RedMonocle scores each Business Index from a value of 1–5. Equipped with these numbers, security leaders can take strategic steps to find, fund, and fix cyber risks.

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Nichole Kelly

Nichole Kelly

Vice President of Growth

Nichole Kelly brings over two decades of experience in growing organizations top line and bottom line revenue. As one of the leading marketing influencers she is the author of "How to Measure Social Media" and has traveled the world teaching marketers how to build and execute ROI-driven marketing strategies at every major marketing conference. Also an entrepreneur, Kelly was also the founder of SME Digital, a digital marketing agency that was sold to Renegade Marketing.

Kelly leads an active life of service and is the founder of The Bipolar Executive blog and podcast. This project is  designed to help shift the conversation around mental illness to one of mental wellness in Corporate America. 

Kelly holds a Bachelor’s Degree in Business Administration with a minor in Marketing from Saint Leo University.

Connect on my blog The Bipolar Executive

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Chris Schroeder

Vice President of Engineering, Co-Founder

Chris Schroeder has over 25 years of experience in large complex IT environments from the Fortune 500 to the federal government. Chris has an extensive technology background in mobility, infrastructure operations, and data analytics. Schroeder is a seasoned entrepreneur and co-founder of App47 and the Vice President of Engineering and co-founder of RealOps (sold to BMC).

Chris is an active volunteer in his community coaching boys and girls lacrosse, supporting high school STEM programs, and serving on the Pastoral Council. 

Schroeder holds a Bachelor’s Degree in Computer Science from Radford University and a Masters Degree in Technology Engineering from George Washington University.

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Sean McDermott

President & CEO, Founder

Sean McDermott’s curiosity for advancing technology began at his first job as a network engineer/architect installing and managing the first private internet for the U.S. Department of Justice. At a time when the internet was just taking off, McDermott was at the forefront and has continued to be on the cutting edge of technology leading Fortune 500 companies through the dot-com bust, 9/11 and the 2008 recession. Sean has over three decades of experience working with CIOs in the Fortune 500 to trail blaze innovation and protect the IT infrastructure of the largest commercial and federal organizations in the world. 

McDermott is a mission-driven, serial entrepreneur who founded Windward Consulting Group, RealOps, Inc. (sold to BMC), App47 and RedMonocle. He is also the founder of the Windward Foundation and Alzheimer’s Caregiver Alliance, an organization dedicated to easing the burden of caregiving for individuals and families touched by Alzheimer’s disease.

McDermott is a member of the Forbes Tech Council and has been featured in Security Boulevard, TechRepublic, IT Visionaries, APM Digest, Inside BigData, DevPro Journal, IT Toolbox and more. He  holds a Bachelor’s Degree in Electrical Engineering from Villanova University and a Masters in Engineering Management from The Catholic University of America. 

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