The FAIR risk assessment methodology aims to find cybersecurity vulnerabilities within a system. Factor Analysis of Information Risk (FAIR) is a framework that provides defense against online threats by using mathematical concepts of precision and accuracy.
The security issues on the Internet are immense and overwhelming. The A. James Clark School for Engineering of the University of Maryland released a study that hackers attack online computers every 39 seconds. To offset all these threats, a systematic approach to risk management is necessary.
FAIR risk assessment methodology focuses on quantification. For those not familiar with its intricacies, the system can be very confusing. This is why we created this advanced guide to help organizations apply the principles of FAIR for problem-solving.
The Need for an Explicit System
Risks are part of life. Organizations deal with them at all times. But taking on a passive approach can cause more problems than it can solve. Thorough preparation is essential and this can come in the form of a risk management program.
An effective program has to be explicit, stated clearly, and without a doubt. It cannot be left to chance or activated only when a problem has already reared its ugly head.
An organization with an implicit risk management program is only concerned with minimum compliance of government regulations and frameworks such as the National Institute of Standards and Framework’s Cybersecurity Framework (NIST CSF). With these guidelines, there may be an annual enterprise risk assessment. But the results are not clearly defined and are hard to rely on when it comes to decisions.
An explicit risk management program has definite risk targets that can be quantified. This is what organizations must strive for.
Assess your FAIR Risk Management
Understanding Risk Management
The FAIR risk methodology model defines the management of risks as the effective integration of policies, processes, people, and technology to maintain acceptable loss exposure levels.
Let’s take a closer look at this definition to closely understand what it provides organizations.
- Cost efficiency. When risks are correctly managed, it can save the resources of organizations. It helps avoid unnecessary fines, penalties, and operational damages.
- Risk objectives. An adequately defined program has risk parameters that can be quantified for comparison and analysis.
Implementation of the FAIR Framework
There is no single risk analysis method that can solve all problems. It is a case-by-case basis.
This is why the first step towards implementing the FAIR framework must begin selecting the risk analysis method that fits an organization.
It must have defensible results and prioritizes practicality. This is possible because FAIR is an open methodology as prescribed by The Open Group for risk management.
As a consortium of over 625 organizations, the Open Group strives to create technology standards to help organizations achieve their objectives. Large corporations such as IBM and Oracle are members.
Governance and Accountability
Governance is a set of practices and responsibilities that an organization must implement at all times, as defined in the NIST Special Publication 800-39. To effectively execute the process of risk management, the business objectives and risk management decisions must align.
There must also be sufficient resources, monitoring and measurement to ensure that the mission objectives are carried out with maximum accountability.
Clean Data
With the FAIR Framework’s focus on quantification, the data’s integrity must be guaranteed at all times. This is a safety precaution to avoid tainting and tampering the information used for risk management decisions.
A good rule of thumb is the wisdom of “garbage in, garbage out.” If the data is unreliable, the subsequent risk analysis will be useless. Risk managers must improve the quality of data gathering for a more defensible output.
Towards the Big Picture
With loss event frequency and loss magnitude as reliable benchmarks, it is easier to oversee a risk management program geared towards the organization’s long-term health.
With enough quantifiable information, it is possible to identify vulnerabilities in the system and reduce its magnitude and frequency.
Consistent Upgrades
A feedback loop is essential in reviewing past threat incidents and to assess the effectiveness of risk controls. Uninterrupted visibility can help comply with regulations, strengthen system defenses, and improve overall risk posture.
Mastering the Flow of the FAIR Risk Assessment Methodology
The best cybersecurity defense is to build a risk management program with a stable and sturdy foundation. There are five aspects to this methodology:
- Cost-effective Management. No resources must be compromised irresponsibly in conducting risk assessments.
- Informed Decisions. There must always be a logical basis for an organization that moves to prevent loss events and anticipate threats.
- Empirical Comparisons. The system must have a baseline of measurements that will correspond to a healthy situation. When incidents happen, there is a quantifiable reference to assess the problem’s magnitude and frequency.
- Accurate Measurements. As the foundation of the risk management process, data is essential in coming up with decisions. This is why there must be due diligence in place regarding the reliability of the data gathering procedures.
- Precise Models. These help decision-makers in the organization to simulate the potential ramifications of unanswered threats by scaling the magnitude and frequency of the loss event as if it were happening in real life. This makes for a good point of reference for future response and defense strengthening.
The reliability of the FAIR framework’s quantitative risk model has become the sole international standard for the Value at Risk (VaR) model for operational and cybersecurity risk.
It is also essential to understand the Risk Management System’s intricacies that must be implemented with impeccable accuracy and precision for best results.
- Risk. These include mapping the potential threats of an organization and rundown of all assets that can be affected. This aspect also encompasses the defensive controls put in place and other significant loss exposure factors, such as government regulations.
- Risk Management. This covers all the processes that are involved in decision-making and implementation. Quantifiable data gathering and empirical comparisons are essential guides and references in making these decisions to protect the organization from harmful threats.
- Feedback Loop. This aspect involves managing and assessing risk controls’ effectiveness, metrics involving threat capacity and contact, implementation awareness measurements, and data analysis of root causes.
As such, there are guide questions that decision-makers can refer to when marking and classifying essential milestones:
- What type of system is the organization implementing?
- What type of data is used and how is it gathered?
- Who are the relevant vendors and suppliers?
- What are the external and internal interfaces involved?
- Who is provided with access to vital aspects of the system?
- What is the management system for the data flow?
Specification of Threats
Threats all have the capability of causing harm and losses in organizations. To effectively manage and prevent their negative impact, it is essential to specify and classify every potential threat agent or community.
In cybersecurity, there are varying modes of threats that occur for every industry. But one of the most common overlapping threats that the FAIR risk assessment can handle involves digital information.
- Unauthorized access, whether through malicious means or by accident.
- Direct attacks or malware infections.
- Data misuse or alteration without management approval.
- Data leaks, whether intentional or not.
- Transmission of nonpublic personal information (NPPI).
- Data loss because of insufficient back-up procedures.
- Productivity interruption due to system glitches.
Perceived Risk and Impact Calculation
Assessing Perceived Risk and Impact is an advanced step in the FAIR risk assessment methodology. An important step is to ignore the existing control environment and to classify the components of the system.
The next step is to understand the potential impact of threats should it become a reality. What is the potential damage that can occur should a lapse happen? These are the considerations in calculating Perceived Risk and Impact.
When the quantification is accomplished, a category must be put to measure the probable impact rating. Here is a typical set of classification values:
- High: The impact is significant and can cause high costs if the damage is repairable.
- Medium: The damage that can occur can be recoverable with subsequent repairs.
- Low: The impact is negligible and not that noticeable.
Determining these calculations will enable decision-makers to understand the potential magnitude of any loss event. This is important in planning sufficient defenses and protection for the organization.
High Profile Breaches in the Past
The mathematical computations in the FAIR framework can help anticipate risk based on its probable frequency and magnitude. Those that explicitly implement the framework have the advantage of security and preparation. But for those who just left it up to chance, the business interruption caused unmitigated disaster and damage. Let’s take a look at some high-profile case studies that neglected their cybersecurity.
Equifax
From mid-May to July 2017, cybercriminals hacked files in the database of Equifax, a multinational consumer credit reporting agency. The hackers exploited a vulnerability in the software, as per the investigation of security consultants and Equifax themselves.
145.5 million accounts of Americans were compromised in the breach. The threat agents accessed the assets of the company by exploiting the Apache Struts web application software. Even if a patch was available, the company didn’t feel the need to apply it yet or monitor and detect the threat agents’ presence. This was a lapse that would have been avoided with a robust FAIR risk management program.
British Airways
The threat agents conducted their online assault on the website of British Airways on August 21, 2018. But their preliminary work to access and exploit the digital security of the aviation giant may have started long before.
Without visibility into its online web assets, British Airways could not detect the threat until it was too late. The breach affected 380,000 customers whose credit card details and other financial information were stolen. Fifteen months before that incident, the airline company suffered a significant computer system meltdown at Heathrow Airport in London, wherein 75,000 passengers on holiday were stranded.
The online breach cost British Airways a record sum of 183 million GBP, a staggering amount that could have been used to implement a robust FAIR framework.
Anthem
In 2015, a large-scale online attack was launched on Anthem, a healthcare provider in America. According to the California Department of Insurance, this exposed 78.8 million consumer records in a data hack perpetrated by a foreign cybercriminal. The chief executive of Anthem described the breach as a very sophisticated external cyberattack.
The damage was severe. The Office for Civil Rights levied a fine of $16 million against Anthem. They also settled a class-action lawsuit amounting to $115 million. These high costs could have been avoided in the first place if it was invested instead in a FAIR framework.
Expert Guidance for Advanced Risk Management
With all the FAIR risk assessment methodology’s complexity, it can be difficult for organizations to implement or understand as they go about their daily operations. RSI Security has years of professional expertise and experience in handling the risk management needs of companies.
We can help you get a reliable risk rating that can significantly lower the frequency and magnitude of loss events. This risk-based approach can help protect your organization against vulnerabilities that can be exploited.
Trust our team to handle the mathematical data gathering intricacies for anticipating the probability of threat incidents. We can help streamline risk analysis to provide decision-makers with the best data set to make informed decisions. With RSI Security, risk management is a cost-efficient and worry-less process.