Solving Cyber Risk: Protecting Your Company and Society

The non-technical handbook for cyber security risk management Solving Cyber Risk distills a decade of research into a practical framework for cyber security. Blending statistical data and cost information with research into the culture, psychology, and business models of the hacker community, this book provides business executives, policy-makers, and individuals with a deeper understanding of existing future threats, and an action plan for safeguarding their organizations. Key Risk Indicators reveal vulnerabilities based on organization type, IT infrastructure and existing security measures, while expert discussion from leading cyber risk specialists details practical, real-world methods of risk reduction and mitigation. By the nature of the business, your organization’s customer database is packed with highly sensitive information that is essentially hacker-bait, and even a minor flaw in security protocol could spell disaster. This book takes you deep into the cyber threat landscape to show you how to keep your data secure. Understand who is carrying out cyber-attacks, and why Identify your organization’s risk of attack and vulnerability to damage Learn the most cost-effective risk reduction measures Adopt a new cyber risk assessment and quantification framework based on techniques used by the insurance industry By applying risk management principles to cyber security, non-technical leadership gains a greater understanding of the types of threat, level of threat, and level of investment needed to fortify the organization against attack. Just because you have not been hit does not mean your data is safe, and hackers rely on their targets’ complacence to help maximize their haul. Solving Cyber Risk gives you a concrete action plan for implementing top-notch preventative measures before you’re forced to implement damage control.

Table of Contents:
About the Authors ix Acknowledgments xi CHAPTER 1 Counting the Costs of Cyber Attacks 1 1.1 Anatomy of a Data Exfiltration Attack 1 1.2 A Modern Scourge 7 1.3 Cyber Catastrophes 12 1.4 Societal Cyber Threats 19 1.5 Cyber Risk 21 1.6 How Much Does Cyber Risk Cost Our Society? 24 Endnotes 30 CHAPTER 2 Preparing for Cyber Attacks 33 2.1 Cyber Loss Processes 33 2.2 Data Exfiltration 34 2.3 Contagious Malware Infection 41 2.4 Denial of Service Attacks 56 2.5 Financial Theft 63 2.6 Failures of Counterparties or Suppliers 68 Endnotes 78 CHAPTER 3 Cyber Enters the Physical World 81 3.1 A Brief History of Cyber-physical Interactions 81 3.2 Hacking Attacks on Cyber-physical Systems 83 3.3 Components of Cyber-physical Systems 86 3.4 How to Subvert Cyber-physical Systems 88 3.5 How to Cause Damage Remotely 91 3.6 Using Compromises to Take Control 92 3.7 Operating Compromised Systems 93 3.8 Expect the Unexpected 95 3.9 Smart Devices and the Internet of Things 99 Endnotes 101 CHAPTER 4 Ghosts in the Code 103 4.1 All Software Has Errors 103 4.2 Vulnerabilities, Exploits, and Zero Days 104 4.3 Counting Vulnerabilities 108 4.4 Vulnerability Management 113 4.5 International Cyber Response and Defense 118 Endnotes 122 CHAPTER 5 Know Your Enemy 125 5.1 Hackers 125 5.2 Taxonomy of Threat Actors 127 5.3 The Insider Threat 143 5.4 Threat Actors and Cyber Risk 145 5.5 Hackonomics 147 Endnotes 151 CHAPTER 6 Measuring the Cyber Threat 153 6.1 Measurement and Management 153 6.2 Cyber Threat Metrics 158 6.3 Measuring the Threat for an Organization 162 6.4 The Likelihood of Major Cyber Attacks 170 Endnotes 182 CHAPTER 7 Rules, Regulations, and Law Enforcement 183 7.1 Cyber Laws 183 7.2 US Cyber Laws 186 7.3 EU General Data Protection Regulation (GDPR) 190 7.4 Regulation of Cyber Insurance 192 7.5 A Changing Legal Landscape 194 7.6 Compliance and Law Enforcement 196 7.7 Law Enforcement and Cyber Crime 199 Endnotes 205 CHAPTER 8 The Cyber-Resilient Organization 207 8.1 Changing Approaches to Risk Management 207 8.2 Incident Response and Crisis Management 208 8.3 Resilience Engineering 212 8.4 Attributes of a Cyber-resilient Organization 214 8.5 Incident Response Planning 218 8.6 Resilient Security Solutions 219 8.7 Financial Resilience 225 Endnotes 234 CHAPTER 9 Cyber Insurance 235 9.1 Buying Cyber Insurance 235 9.2 The Cyber Insurance Market 244 9.3 Cyber Catastrophe Risk 248 9.4 Managing Portfolios of Cyber Insurance 251 9.5 Cyber Insurance Underwriting 258 9.6 Cyber Insurance and Risk Management 263 Endnotes 264 CHAPTER 10 Security Economics and Strategies 267 10.1 Cost-Effectiveness of Security Enhancements 267 10.2 Cyber Security Budgets 271 10.3 Security Strategies for Society 276 10.4 Strategies of Cyber Attack 283 10.5 Strategies of National Cyber Defense 289 Endnotes 294 CHAPTER 11 Ten Cyber Problems 295 11.1 Setting Problems 295 1 The Canal Safety Decision Problem 298 2 The Software Dependency Problem 300 3 The Vulnerability Inheritance Problem 301 4 The Vulnerability Count Problem 302 5 The Malware Overlap Problem 303 6 The Vulnerability Lifespan Problem 304 7 The Binary Similarity Problem 304 8 The Virus Modification Problem 306 9 The Cyber Criminal’s Dilemma Problem 306 10 The Security Verification Problem 307 Endnotes 308 CHAPTER 12 Cyber Future 309 12.1 Cybergeddon 309 12.2 Cybertopia 315 12.3 Future Technology Trends 321 12.4 Getting the Cyber Risk Future We Want 328 Endnotes 331 References 333 Index 355