The World Economic Forum has released a new framework this week that helps companies calculate the risk of cyberattacks.
The risk calculation has three components -- an assessment of a company's vulnerabilities and defenses, the potential cost of data breaches, and a profile of the attacker.
Security experts praised the framework's holististic approach towards cyberrisk.
“The framework's orientation towards probabilistic models of possible losses from attacks will keep businesses focused on minimizing total possible losses rather than building hard brittle shells around their networks," said Lance Cottrell, chief scientist at Herndon, VA-based security firm Ntrepid Corp.
In addition, it puts more focus on dealing with the effects of attacks once they do occur.
"It is impossible to prevent all successful attacks," he said. “The framework's focus on resiliency, rather than just prevention, reflects a critical evolution in security thinking."
The framework also builds on President Barack Obama's cybersecurity agenda, particularly when it comes to raising awareness and information sharing.
"Before the State of the Union speech, the problem was kind of amorphous," said Pete Metzger, vice chairman and leader of the global cybersecurity practice at New York-based CTPartners, an executive search firm. "He's trying to bring it to the top of the agenda, but failed to provide a framework or details."
The World Economic Forum framework, especially if combined with Obama's proposed cybersecurity legislation, could make a big impact in the U.S. in particular, added Adam Kujawa, head of malware intelligence at San Jose, CA-based Malwarebytes Corp.
"Most organizations stray away from serious investments in cyber security because understanding the risk versus cost is difficult," he said. "You never know what new kind of attack might come around and how to protect a network from such an attack."
The framework helps organizations get into the minds of attackers, he added.
The framework also helps elevate the risk assessment function to higher levels of the corporate organizational structures.
"This framework forces executive sponsorship," said Kevin West, CEO at Brookline, MA-based security firm K Logix LLC.
"It has a business focus to it," he added. "You can't accomplish this framework without executive involvement. This is not a tactical approach to a technical problem. It is a strategic approach that factors in business concerns."
In the framework, created with collaboration of Deloitte, the World Economic Forum admits that there are some challenges involved. For example, there's a lack of the historical data necessary to estimate the probability of attacks from particular types of attackers for particular industry segments.
To help address this gap, the World Economic Forum called for global information sharing about cyberthreats.
The lack of good data is also holding back the evolution of a strong cyber insurance market, said Mike Lloyd, CTO at Sunnyvale, Cal.-based RedSeal, Inc.
For example, companies can use vulnerability taxonomies such as those of the National Vulnerability Database to identify weak areas in their security. In fact, this is something that Red Seal does for its clients. But linking those vulnerabilities to actual dollar losses is something that will take a lot more data than is available today, he said.
One problem is that even when companies have cyber insurance in place, they're not reporting all incidents to those insurance companies -- much like a bad driver might avoid reporting a fender-bender to not have their rates go up.
Mandatory breach reporting requirements such as those Obama proposed would help provide more data for these kinds of actuarial tables, Lloyd said.
"Right now, we can tell you how fit you are," he said, using a health insurance analogy. "But not how likely you are to get sick this year."
This story, "New framework helps companies quantify risk" was originally published by CSO.