What are Security Ratings Used For?

Understanding and managing cybersecurity risks is paramount and security ratings have emerged as a pivotal tool in this endeavor, offering insights into an organization’s cybersecurity posture and that of their third-party associates. There are multiple cybersecurity ratings companies, including FortifyData, BitSight and SecurityScorecardThis blog delves deeper into the multifaceted role of security ratings, emphasizing the importance of monitoring both internal and external cyber risks, as well as their other use cases. 

Security ratings are essentially a measure of an organization’s cybersecurity health. They are derived from a variety of data points, including known vulnerabilities, historical cyber incidents, and other relevant factors. These ratings are often compared to credit scores, but instead of assessing financial risk, they evaluate cyber risk. 

Why are Security Ratings Important?

Security ratings play a critical role by providing: 

  • Quantifiable Metrics: Instead of vague assurances, organizations can present a concrete security rating score to demonstrate their cybersecurity posture. 
  • Continuous Monitoring: Security ratings offer a dynamic assessment, allowing organizations to understand the latest risks and vulnerabilities that are impacting their organization. Plus, continuous monitoring is often a compliance requirement. 
  • Benchmarking: Organizations can compare their ratings with industry peers, identifying areas of improvement and ensuring they meet or exceed industry standards. 
  • Accurate Risk Representation: Newer companies in the security ratings industry, like FortifyData, have newer methodologies that can provide a more accurate and contextualized view of cyber risk published as a rating. 

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The Evolution of Cybersecurity Ratings and How They Can Boost Risk Visibility

Security Ratings Use Cases

  • Enterprise Risk Management: Organizations can monitor their own cyber risk, allowing them to more easily:  
  • Identify Weak Points: Organizations can discern areas in their digital infrastructure that are most susceptible to breaches. 
  • Effectively Allocate Resources: By understanding their cyber health, organizations can allocate resources more effectively, bolstering weak areas before they are exploited. 
  • Make Continuous Improvement: Cyber threats evolve; security ratings offer dynamic assessments, ensuring organizations remain a step ahead. 
  • Third-party Vendor Assessments: With businesses increasingly relying on third-party vendors, understanding their security posture becomes crucial. What is a security risk rating for this vendor or that vendor? How much cyber risk will they expose us to? A vendor’s vulnerability can become a direct threat to the organization. Security ratings are a vendor risk management tool that allows organizations to see the risks and security posture associated with their third parties. 
  • Mergers and Acquisitions: Before finalizing a deal, companies can assess the cybersecurity posture of a potential acquisition, ensuring no hidden cyber liabilities. 
  • Enhancing Trust from Stakeholders: Stakeholders, whether they are investors, customers, or business partners, need assurance that an organization takes cybersecurity seriously. Security ratings bolster this trust by: 
    • Showcasing Commitment: A high security rating is a testament to an organization’s dedication to cybersecurity, showcasing proactive measures taken to mitigate risks. 
    • Transparency: By sharing their security ratings, organizations offer a transparent view into their cybersecurity health, fostering trust among stakeholders. 
    • Informed Decision Making: For investors and business partners, understanding an organization’s security rating can be a crucial factor in making informed decisions, ensuring they align themselves with entities that prioritize cybersecurity. 
  • Security Ratings in Cyber Insurance: The cyber insurance industry has witnessed exponential growth, driven by the increasing number of cyber threats. Insurers need a reliable way to assess the risk associated with insuring a particular entity, and security ratings provide just that. What is a security risk rating where the company will get lower premiums versus a higher premium? Security ratings help answer that based on the perceived cyber risk they present as represented in the rating. Security ratings provide insurers with: 
    • Risk Assessment: Before underwriting a policy, insurers can use security ratings to gauge the cybersecurity health of an applicant. A higher rating might lead to lower premiums, while a lower rating could result in higher premiums or even denial of coverage. 
    • Policy Customization: Insurers can tailor policies based on the specific risks highlighted by the security rating. This ensures that organizations are not over-insured or under-insured. 
    • Claim Verification: In the event of a claim, insurers can refer back to the security rating to verify if the insured entity had misrepresented their cybersecurity posture at the time of policy issuance. 
    • Continuous Monitoring: Insurance companies are starting to consistently monitor consumers when it comes to driving behavior. The time may come where cyber insurance providers will evaluate security ratings or continuous monitoring programs more continuously as part of their underwriting process.  
    • Get tips in our e-book on how to lower cyber insurance premiums. 

FortifyData's Security Ratings

FortifyData is at the forefront of cyber risk management. Our comprehensive platform performs automated risk assessments, both internal and external, as well as for cloud environments and third-party entities. By continuously analyzing cyber threat intelligence, likelihood, and business impact, FortifyData provides a prioritized view of cyber risks. This not only aids organizations in understanding their security posture but also in managing risks within specific business units.  

Furthermore, FortifyData emphasizes the importance of continuous assessments, especially for critical vendors, highlighting the fact that a vendor’s exposures can directly impact the organization. In essence, the FortifyData platform offers businesses a holistic view of their cyber risk landscape. 

In summation, security ratings are not just a metric; they are a compass, guiding organizations through the intricate maze of cybersecurity. By understanding and monitoring both internal and third-party risks, businesses can fortify their digital frontiers, ensuring resilience and continuity in an ever-evolving cyber landscape. With platforms like FortifyData, organizations can further enhance their understanding and management of cyber risks, ensuring a safer digital future. 

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