Explanation:
Cyber risk is accurately defined as the potential for adverse consequences arising from unauthorized access, use, disclosure, disruption, modification, or destruction of information systems, digital assets, or data. This definition encompasses a wide range of threats, including data breaches, hacking, phishing attacks, malware, ransomware, and other forms of cyberattacks. These threats can compromise the confidentiality, integrity, or availability of digital resources, leading to significant financial and reputational damage for individuals and organizations. The hacking of SWIFT and the subsequent loss from the Central Bank of Bangladesh is a prime example of cyber risk.
Choice B is incorrect. While reputation risk can be a consequence of cyber risk, it is not the definition of cyber risk itself. Reputation risk refers to potential negative impacts on an organization's reputation due to various factors, which may include but are not limited to cyber incidents.
Choice C is incorrect. This choice describes operational risk, which includes losses from inadequate or failed internal processes, people and systems or from external events. Although cyber threats can lead to operational failures, they represent only one aspect of operational risk and do not define the entirety of cyber risk.
Choice D is incorrect. This choice refers to model risk - the potential for adverse outcomes arising from inaccuracies or misapplications in financial models used by an organization for decision-making or managing risks. While a poorly designed cybersecurity model could increase an organization's vulnerability to cyber threats, this does not encompass the full scope of what constitutes as 'cyber risk'.
Things to Remember
Ultimate access to all questions.
Q.5330 The hacking of the Society for Worldwide Interbank Financial Telecommunication, also known as SWIFT that led to the loss of approximately $81 million from the Central Bank of Bangladesh highlighted the exposure of individuals and institutions to cyber risk. Which of the following is an appropriate definition of cyber risk?
A
The potential for adverse consequences arising from unauthorized access, use, disclosure, disruption, modification, or destruction of information systems, digital assets, or data.
B
The potential for negative impacts on an individual or organization's reputation due to factors such as data breaches, privacy violations, or unethical practices.
C
The potential for losses or damages stemming from insufficient or malfunctioning internal controls, technology failures, or human errors in the context of an organization's operations.
D
The potential for adverse outcomes arising from inaccuracies, limitations, or misapplications of financial or statistical models employed by an organization in decision-making or risk management.
No comments yet.