Basel II and Basel III have been well-known frameworks for years, determining how banks grant loans to companies, particularly to assess the credit default risk of the requesting company.
The reason for this is as simple as it is logical: financial institutions must, for example, maintain sufficient capital to cover potential losses from loans in case a borrower can no longer service the loan – keyword credit default risk.
In our digitalized world, cybersecurity is not just a technical issue but an integral part of corporate risk strategy.
Financial institutions consider not only so-called "hard facts" like financial metrics and cash flows when granting loans but also "soft facts" that provide insights into the business model, market position, or compliance. The IT infrastructure and cybersecurity of a company are increasingly important factors taken into account in lending decisions.
The reason for this is simple: only companies that invest in modern and scalable IT can grow effectively and thus secure the long-term success of their business model.
Investment in digital technologies will soon determine the success or downfall of companies.
The ability to prepare for cyberattacks, operate an incident and risk management system, and implement appropriate security measures to prevent, detect, and remediate cyber threats will become a key success factor for a company. This becomes clear when considering that the average cost of a cyberattack is around 4.3 million euros, and the average time to fully resolve and eliminate the threat is 182 days.
These figures make it clear that many companies cannot survive such an attack financially, not to mention fines under the GDPR or other legal standards.
Even if the costs for data recovery - if possible - and resulting revenue losses due to business interruptions and potential penalties due to supply chain disruptions do not ruin the company, there will still be damage to the reputation and trust of customers, suppliers, and employees. This clearly shows why a robust IT security strategy is so crucial for credit rating assessment. Strong cyber resilience ensures long-term business stability and is thus essential for the company's creditworthiness.
