MATHEMATICAL ASSESSMENT OF CYBERSECURITY RISKS IN THE DIGITAL ECONOMY

The rapid expansion of digital financial services creates both economic opportunity and systemic cybersecurity vulnerability. Quantifying the relationship between cyber-attack frequency, associated economic losses, and protective investment remains an open challenge in the literature. This paper introduces a straightforward mathematical framework — combining a loss function, an exponential risk-reduction model, and a return-on-security-investment (ROSI) formula — to measure and optimise cybersecurity spending in a digital economy context. The model is calibrated using empirical data from Uzbekistan's banking sector (2018–2023). Results show that a one-unit increase in the Cybersecurity Readiness Score (CRS) reduces expected annual losses by USD 3.4 million on average, and that the optimal security budget allocation lies between 8 % and 11 % of total IT expenditure. The framework offers financial institutions and regulators a transparent, data-grounded tool for evidence-based cybersecurity policy decisions.