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A great paper and well worth a read from the The University of Western Australia (UWA) examining the potential impact of data breach notifications regulations on borrowing costs across the U.S. Those companies in states affected by data breach notification regulations and the cost of debt.
“Our findings suggest that businesses with a strong cybersecurity focus are better positioned to navigate the regulatory landscape created by DBN laws,†said Agarwal. “Investing in cybersecurity not only protects a company’s assets but also improves its financial resilience by reducing the risk of higher borrowing costs.â€
While it may seem obvious, those companies that focus on the management of cyber risk will be perceived to be less of a risk. There is a limited body of evidence to demonstrate the case. For boards these considerations are important, the cost of borrowing is a function of an organisations risk profile. Due to the direct and indirect affect of cybersecuirty risks on cashflow. Also demonstrated by the grading that companies such as Moody’s and S&P have placed on organisations affected by cyber incidents.
One must not forget that cybersecurity risk management affects corporate stability and resilience, and in turn financial performance. A risk that cyber insurance does not address, as demonstrated by the reports one reads about the increasing cyber coverage gap.
@Thaddeus Dziekanowski Brian D. McCarthy Faisal Khan Rachel V. Rose, JD, MBA
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberregulation #creditrisk
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