Definition
Quantitative risk analysis is a systematic process used to numerically assess the potential impact of risks on an organization's assets. It involves assigning monetary values to assets, identifying threats, estimating the probability of those threats occurring, and calculating the potential financial loss. This analysis helps prioritize risks by providing a data-driven basis for decision-making, allowing organizations to allocate resources effectively to mitigate the most significant threats. For instance, a company might use quantitative risk analysis to determine the potential financial loss from a ransomware attack, considering the cost of downtime, recovery, and potential fines. Unlike qualitative risk analysis, which uses descriptive scales, quantitative analysis relies on objective data and statistical methods to express risk in financial terms. This concept is crucial for understanding security controls and is frequently tested on certifications like CISSP and CySA+.