Decoding Cyber Risk: A Visual Representation

Cyber Risk is top of mind for many organizations today. But what exactly constitutes cyberrisk? It can be helpful to break it down into three main components: threat, vulnerability, and consequence.

1. Threat refers to anything that has the potential to cause harm or allow unauthorized access to an information system. This could be malicious actors, state-sponsored groups, cyber criminals or insider threats.

2. Vulnerability is a weakness that can be exploited by a threat. Examples include unpatched software, misconfigured controls and users who may fall victim to social engineering.

3. Consequence is the impact or damage that would occur if a threat successfully exploits a vulnerability. Financial loss, reputational harm, loss of proprietary data, and business disruption are common consequences.

Cyber Risk exists at the intersection of threat, vulnerability, and consequence. To properly assess and manage cyberrisk, organizations need to understand all three elements and how they interact.

The key difference is that without all three elements — threat, vulnerability, and consequence — there is no real Cyber Risk present.

If you have Threat & Vulnerability (but no Consequence), we call it: Potential Cyber Risk If you have Threat & Consequence (but no Vulnerability), we call it: Theoretical Cyber Risk If you have Vulnerability & Consequence (but no Threat), we call it: Cyber Risk Exposure

• Cyber Risk: Represents the potential for losses or damages that may occur due to a threat exploiting a vulnerability and resulting in a consequence. It is the overarching concept that encompasses all aspects of the potential negative outcomes of cyber events.

• Potential Cyber Risk: The intersection of Threat and Vulnerability, highlighting that there is a risk present if both a threat exists and the system is vulnerable to it, even if a consequence has not yet occurred.

• Theoretical Cyber Risk: The intersection of Threat and Consequence, there is a theoretical risk when a threat could have serious consequences, even if a current vulnerability isn’t identified.

• Cyber Risk Exposure: This is the area where Vulnerability and Consequence intersect, indicating that there is exposure to risk when a system is vulnerable and the consequences of an exploit are potentially significant, regardless of the current level of threat.

In summary, this visualisation helps to explain cyber risk as a function of threat, vulnerability, and consequence. Effective cyber risk management involves identifying and mitigating vulnerabilities, monitoring and countering threats, and minimizing the potential consequences of cyber events. This explanation is part of the Cyber Risk Management Lifecycle framework.