The term cyber risk is often used to describe a business’ overall cybersecurity posture, i.e., at how much risk is this business, given the measures it has taken to protect itself. It’s often coupled with the idea of cyber insurance, the necessary coverage between what a company can do security-wise, and the threats it faces day in and day out. Cybersecurity used to belong exclusively in the realm of Information Technology, one of many business silos that while important, was only a small piece of the business and as such, often delegated to a C-level manager who interfaced with other executives as necessary. Today’s businesses have outgrown this model, as what used to be considered information technology has grown to encompass business itself, permeating every aspect of it, governing its speed, its range, its possibilities. As a CEO or CFO, the way your business handles information technology and begins to foster cyber resilience, reflects the way you think about your company and its place in the contemporary market.
According to the recently released 2016 Data Breach Investigations Report (DBIR) digest, produced annually by Verizon to help educate the industry, companies spent hundreds of billions of dollars last year as a result of cybersecurity incidents.
As the digital economy has matured, so has the recognition that cyber risk cannot be eliminated; it must be managed. Insurance is the mechanism by which we distribute risk so that rare but catastrophic events don't ruin the unfortunate person (or company) that they happen to. Accurately pricing cyber insurance, however, is still in its infancy. Comparing the methods for assessing cyber risk to those used in property and casualty insurance points the way forward for better methodologies.
The answer is simple: because it's highly profitable. Credit card numbers are still the best we've got for transacting digitally and health records are 10 times more valuable on the black market. And despite efforts from the infosec community at large, cybercrime continues to increase in frequency and severity. The more important and difficult question is not why, but how—that is, how can companies not just survive, but thrive in a landscape of digital threats?
Cyber resilience is a fundamental change in understanding and accepting the true relationship between technology and risk. IT risk (or cyber risk, if you prefer) is actually business risk, and always has been. And the cybersecurity industry, for what it's worth, has generally avoided this concept because it goes against the narrative that their respective offerings—whether it's a firewall, IDS, monitoring tool, or otherwise—would be the one-size-fits-all silver bullet that can keep businesses safe. But reality tells a different story.