What does the term "risk quantification" refer to in the context of FAIR?

Risk quantification in the context of the FAIR (Factor Analysis of Information Risk) framework specifically refers to the process of numerically estimating the potential impact of risk on an organization. This involves translating various inputs related to risks—such as threats, vulnerabilities, controls, and assets—into a numerical value that can be used to assess the potential financial consequences of those risks.

Quantifying risk allows organizations to make informed decisions based on the likelihood and potential impact of various risk scenarios. This numerical estimation aids in prioritizing risk management efforts and allocating resources effectively, as organizations can compare different risks based on their quantified potential impact.

While risk management policies and qualitative assessments are essential components of overall risk management, they do not specifically focus on the numerical estimation aspect that is central to risk quantification. The same applies to the notion of assessing cybersecurity readiness, which is more about evaluating an organization's security posture rather than quantifying the financial implications of specific risks.