Risk is having a moment, and RiskLens, a company that quantifies risk according to the Factor Analysis of Informational Risk (FAIR) model, is showing that moment's currency with a $20 million round of Series B funding announced today.
"[Investors] see boards of large companies in North America, but now beyond that, internationally as well, asking the same kind of questions, such as, 'How much risk do we have related to cyberattacks?' and, 'Are we spending too much or too little to deal with the cybersecurity issues?'" says Nick Sanna, CEO of RiskLens.
To answer those questions, boards are seeking to understand risk assessment in language different than that used by most security and risk professionals, Sanna says.
"Board members are getting answers in terms of 20 red, 15 yellow, and a bunch of green, or they're getting scores like a credit score, but what they want is how much risk we have in dollars and cents," he says.
Many security professionals still aren't discussing risk "in a quantitative, real-dollar point of view," adds Bob Maley, CSO of NormShield, a company that assesses third-party risk. "What they do is take a qualitative view and assign dollars to big buckets to try to give an impression that they're talking in real financial terms."
These days companies are placing cyber-risk in context with all the risks they face, Sanna says. "At the corporate level, they're looking at cyber as probably one of the major risks alongside other forms of operational risks, including weather, market risk, or credit risk categories," he says.
The difference between cyber-risk and those other categories is how they're assessed. Companies have traditionally "delegated the measurement and reporting on that risk to the cybersecurity function because they feel that this is a very technical discipline that a typical risk team is not equipped to assess," Sanna explains.
This measurement of risk is both being driven by, and running ahead of, the cyber insurance industry, Sanna says. "While the insurance industry is doing a great job in raising the awareness of the need to consider some insurance, they have not equipped themselves yet with the means to assess cyber-risk in detail so that the buyers can buy the right product," he says.
Risk assessment and reporting is moving forward, and moving quickly, Sanna believes. "An assessment of cyber-risk in financial terms is becoming the norm," he says. "You can finally measure it in a way that makes sense of the business, and you can make good decisions."
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