Operational resilience | Risk Management & Reporting

February 5, 2024

A recent KPMG Report1 suggests that protecting against and dealing with cyber risks will be the major challenge for senior executives in 2024. It is clear that despite high levels of security investment, organisations continue to suffer from cyber attacks. Do executives have good visibility of the current cyber resilience of their organisations? And, are they getting value for money with their current cyber uplift efforts?

There is no question that cyber attacks continue to plague enterprises. Apparently, cyber attacks and the volume of compromised digital assets increased simultaneously in 20232. Whether it’s the increasing number or the malicious nature of those attacks, it is quite clear that old-school risk management efforts are failing. Globally, the gap between our cyber security defensive efforts and our resilience is growing, with an increased number of cyber victims as a result.

It’s not all gloom and doom – but you need visibility

If the management of this gap was impossible, the situation would be one of despair. But the fact is that post incident forensic investigations of attack victims, typically reveal poor levels of cyber hygiene. A review by APRA in Australia in mid-2023 (see here) observed poor cyber security governance in a sample group of financial organisations: poor security control management, a lack of business recovery planning and inadequate 3rd party risk assessment. And in December 2023, the UK National Cyber Security Centre revealed that maintaining proper cyber hygiene improves cyber resilience, strengthens defences against cyber attack3, and informs more effective response and recovery processes.

Certainly, cyber security is vexing but like any problem in business, to understand it you need to: collect reliable data, test your remedial hypotheses and measure the results. But above all, you need visibility of the situation and the ability to measure any resultant changes in your cyber resilience to confirm value (or not) and guide your management efforts.

Attributing value and expected returns from cyber security spend

Like any other, investment in cyber security should only proceed if it shows a positive ROI – and the decision needs to be based on reliable evidence. Whether it’s at the executive level or in the security team, everyone needs hard measures to establish the true value of a security strategy or solution.

Ask your CFO – outputs from anecdotal reports, subjective surveys or unattributed findings from eminent security specialists will not satisfy the investment committee.  Verifiable information is needed to establish the value of current and new cyber security initiatives. You wouldn’t risk your health on a course of medical treatment without evidence of its worth; cyber security is no different.

Cyber security is different to other forms of risk

  • Risk models for cyber security are some way off.
  • The threat environment is volatile and complex which leads to uncertainty.
  • It operates at machine speed; so organisations need prompt access to relevant security management information.

Effective cyber risk management needs a framework

Because cyber risk is different and cyber security literacy amongst many senior executives can be limited, security frameworks have been developed by international security agencies to better define cyber security principles and simplify best practice. They link the risk policy requirements of executives with the technical controls, best understood by security experts, to simplify communication between the stakeholders. Cyber security frameworks, like the Australian Cyber Security Centre’s Essential 8 Maturity Model (E8MM), prescribe security controls and settings depending on the security maturity of the organisation. The E8MM is categorised by control types and easily translates unmitigated security vulnerabilities into cyber resilience maturity measurement.  There are other security frameworks of course, including from NIST in the US and the international standard ISO 27001, each designed to assist in particular aspects of the cyber security risk management process. They are not dissimilar, with comparable sets of security controls (sometimes called security hygiene) to inform an organisation’s cyber resilience management.

By establishing one of these frameworks as the basis for your cyber resilience program the effectiveness of security controls and resulting cyber resilience can be systematically determined. If the process is consistent and evidence-based, regular measurements can be performed to inform all cyber security stakeholders of the benefits or shortcomings of any mitigation efforts, and their value determined.

What you can’t see – unless you look

In the volatile world of cyber security, threat vectors can quickly expose enterprises to attack. Adversaries are regularly scanning networks to remotely identify possible pathways to exploit known vulnerabilities. Thousands of devices, and hundreds of software solutions across your network, means tens of thousands of rapidly changing threat vectors for security teams to secure. The odds are stacked against your team and just one exploited vulnerability can mean compromise. There is no longer a place for just an annual cyber security audit or a regular security review by a cyber expert – things change too quickly. You need fast and accurate information about the effectiveness of your controls and their impact on your cyber resilience.

Determining value using data-driven measurement

This is where data-driven risk assessment4 can help. Regularly analysing and reporting on the effectiveness of your security controls against multiple vulnerabilities is a challenging task and is driving an irreversible shift towards software-assisted cyber security management5. Data-driven cyber solutions, by automatically collecting and analysing huge volumes of your security data, can enable security teams to measure the net number of vulnerabilities (at time=n) for a given set of security controls settings. This baselines the level of cyber resilience and, with its bottom-up data, provides insights into how that performance can be improved. To determine any performance improvement from a particular mitigation effort(s) re-measurement, (at time =n+1), will quickly reveal any resultant improvement in cyber resilience. Being able to reliably measure the difference in effectiveness each time mitigating control settings have been adjusted, provides important information on the resilience of your organisation and the value of those efforts.

The benefits of data-driven cyber solutions are that they inform you of gaps in your defences and provide clarity as to the success of your security uplift efforts. And with cyber security now a key performance indicator for every business stakeholder, reliable performance metrics are key to its effective management. Not only do all security stakeholders have access to this information and the supporting evidence, but data-driven security technologies can scale to meet the needs of even large organisations where costs, frequency and immediacy of cyber security audits are an increasingly important consideration.

Let’s look at a couple of use cases to demonstrate the value of being able to measure the effectiveness of the security controls that determine the measure of your cyber resilience.

The cost of cyber self-insurance

Consider your insurance renewal process. Prior to renewal the executive and maybe the security team will receive, from your insurer, a lengthy questionnaire seeking detailed information about the state of your security controls. This document is important. It prompts the security team to detail ongoing security progress and translates that information into a performance improvement plan for the executive.

The reality, of course, is that this document is a legal record of the current state of cyber security defences; and the better the documented cyber controls the more attractive the terms for renewal. It defines the level of security controls required to avoid a subsequent claim being rejected because of pre-existing vulnerabilities or failure to maintain adequate levels of cyber resilience. Insurance is an important risk management tool, and cyber is no different, except that by agreeing to maintain a particular level of cyber security defence, without understanding its costs, could end up being an expensive investment decision. In cyber, where knowledge and understanding are sometimes limited, the ability to establish whether it is better value to insure your risk or maintain your own ongoing mitigation strategies, is important.

Crown jewel assets

The ability to accurately assess the relative change in the effectiveness of a control over time is important to objectively measure cyber resilience. Because security frameworks are categorised by IT assets and control types, a bottom-up measure of the net vulnerabilities across your enterprise, or part of it, means you can quickly assess the effectiveness of the controls in place. It means that you can establish the cyber resilience levels of a particular IT asset and quickly address any highlighted deficiencies to better secure it.

So, in a top-down sense, if your board wants to pay particular attention to the protection of its crown jewels, a data-driven risk assessment can very quickly identify their level of cyber resilience, and inform any additional mitigation efforts that are required to maintain an adequate, on-going level of resilience.

Measuring the value of your cyber security efforts

Data-driven cyber assessments enable both senior executives as well as security teams, to get clarity about the ongoing cyber posture and governance of the organisation. The success (and therefore value) of a particular security mitigation strategy or investment can now be accurately assessed at scale and speed; and its ongoing suitability more easily established.

These automated data-driven cyber solutions provide bottom-up evidence to support all security stakeholders in their ongoing operational management activities. Whether it be security performance uplift, the implementation of new policies or enabling senior executives to meet their regulatory responsibilities, the timeliness of the information relevant to determine the value of cyber security investments is no longer in question.

Talk to us about evidence-based cyber security decision making

  1. https://assets.kpmg.com/content/dam/kpmg/au/pdf/2024/keeping-us-up-at-night-australian-business-leader-challenges-2024.pdf
  2. https://www.munichre.com/landingpage/en/cyber-insurance-risks-and-trends-2023.html
  3. https://www.ncsc.gov.uk/news/uk-cultural-institutions-gather-for-summit-on-the-cyber-threat
  4. https://huntsmansecurity.com/blog/active-management-for-operational-and-cyber-resilience/
  5. https://www.ncsc.gov.uk/blog-post/data-driven-cyber-empowering-security-focused-insights

Active management for operational and cyber resilience


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