What is Risk Quantification?

Mark Tattersall | March 31, 2022

You may or may not have already listened to one of our podcasts, read our eBook, or caught one of our blog posts about risk quantification, but we’ve been talking about it a lot. Why? At LogicGate, we see risk quantification as a way to help you make informed decisions about critical risk scenarios. And that’s a big deal. Risk quantification enables you to prioritize risks by the magnitude of potential loss for better cybersecurity budget allocation, investment, and mitigation strategies.

Right now, risk quantification is experiencing wider acceptance as a methodology. One reason is the growth of companies' access to historical data. Another reason is that risk quantification makes it easier to communicate your risk posture to the board and key stakeholders. Viewing risk numerically and expressing the math in relateable and measurable terms leads to better understanding and alignment throughout your organization. I’ll walk you through a few of my tips on how to get started with risk quantification or at least help deepen your understanding.

Ask the Right Questions to Get the Right Answers

Risk quantification is a journey, not a sprint. To get the results your organization wants, you need to have the proper commitment and mindset. A great place to start this journey is to make sure the right questions get answered. Here are five questions to consider when thinking about your organization’s quantitative risk analysis: see a complete list of questions here.

  1. Which objectives could fail due to current risks and what is the financial impact on the organization?
  2. What does the board require from you to validate that you are making the right decisions?
  3. What financial impact does risk have on products and services?
  4. Does your organization monitor key risk indicators across critical objectives, projects, and processes?
  5. Is your organization optimally measuring and modeling risk in a quantifiable manner?

Tips to Know When Starting Your Risk Quantification Journey

  • Don't boil the ocean. Start as simply as you can by focusing on the most significant risks
  • As you gain familiarity and momentum, expand your scope
  • Take an objective approach to risk measurement using models like FAIR
  • Learn to tell an ROI based risk story

For more risk quantification tips and advice on how to get started, you should check out these videos from GRC expert, Dustin Owens.

Risk Quantification Resources

Speaking of tips, I’ve pulled together some of my favorite resources so you can easily access them in one spot: 

Suppose you are ready to start your risk quantification journey and want to learn more about how risk quantification can enhance your risk program. In that case, download our eBook, The Definitive Guide to Risk Quantification — also available as an audiobook! 

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