The Value of Cybersecurity Ratings for CFOs
Security ratings may not be as well-known outside the security world, but in a nutshell, they evaluate an organization’s cybersecurity risk using data-driven metrics that provide visibility into an organization’s security posture. They also provide valuable insights and identify potential vulnerabilities throughout their vendor ecosystems. Now more than ever, in the age of remote work, ensuring a solidified and secure posture across the entire enterprise network is paramount.
Organizations with a higher security rating have a lower risk profile, and with that comes significant business value and opportunity in terms of investor confidence and trust from consumers and partners. Conversely, a low-security rating reveals issues with the company’s ability to protect critical business assets that can negatively impact corporate reputation and present financial risk to the organization.
As CFOs begin to take an increasingly active role in managing cybersecurity, they must keep in mind the value of security ratings and their financial impact.
The CFO and Cybersecurity
In a traditional corporate structure, cybersecurity historically has been managed and operated by CISOs, security executives and their teams. With the average global cost of a data breach having reached 3.9 million in 2019, it is no wonder that financial officers are becoming increasingly concerned with the security practices at their organizations.
As businesses realize the substantial costs associated with data breaches, CFOs are being tasked with understanding and evaluating the financial implications of inadequate cybersecurity.
Below are the aspects of an organization’s security posture that can be accounted for by security ratings platforms, helping CFOs relay cybersecurity and, in turn, financial security to stakeholders and the board.
Ensuring Regulatory Compliance
From a financial perspective, non-compliance can result in penalties and fines, and news surrounding non-compliance can impact business relationships. Cybersecurity ratings platforms can help demonstrate that your organization’s security practices are well-founded and effective, solidifying trust in your business partnerships.
Monitoring Vendor, Third- and Fourth-Party Security
Most organizations outsource critical business services such as human resources (HR), billing, customer relationship management (CRM) and enterprise resource planning (ERP). These services can complicate the vendor risk management process as each third-party vendor likely also outsources operations to vendors of their own. Security ratings platforms collect publicly available information and therefore are able to offer visibility into potential risks across the entire vendor ecosystem. This way, CISOs and CFOs can be sure that third- and fourth-party vendors will not be at risk of compromising critical data.
Exhibiting a Sound Security Posture With Fewer Resources
The cybersecurity skills gap has presented organizations with a challenge when it comes to hiring and training effective security personnel, leaving security teams with fewer resources to get the job done. Security ratings platforms provide a single dashboard for monitoring and prioritizing cyber risk, allowing organizations to secure their ecosystems more efficiently. With a security ratings platform, you can gain real-time visibility into potential risks without needing additional personnel to manually monitor, audit, log and remediate vulnerabilities.
The Business Value of High Security Ratings
Due to the corporate risks that data breaches represent to organizations across industries, CFOs and finance executives are taking an active role in overseeing cybersecurity management. As security ratings become more integral, these leaders are beginning to realize that a high cybersecurity score can help increase stock valuation and improve relationships with insurers, customers and even investors.
Through a high security rating, organizations are able to prove regulatory compliance and vendor due diligence and exhibit a sound security posture. Stakeholders, partners, consumers and investors then become more likely to trust the organization’s executive team and business management practices. These ratings help instill confidence in corporate relationships and improve business efforts, which in turn can result in significant ROI.
A comprehensive security program translates to financial well-being. Organizations that invest in cybersecurity and earn high security ratings will be better positioned in the marketplace from a security standpoint and an overall business view. More secure companies will be more apt to gain strong partnerships, improve customer relationships and attract high-value investors—all of which will contribute to an increase in the business’s financial security.
by Todd Graber