The landscape of cyber threats is no longer emerging; it’s an ever-evolving reality that demands continuous adaptation and vigilance. As these risks evolve at an accelerated pace, entities face challenges in measuring, assessing, and responding to cyberattacks effectively.

Cyber breaches manifest in various forms, ranging from external threats like hacking and malware to internal vulnerabilities stemming from misuse or error. Additionally, breaches can result from physical, social, and environmental factors, posing multifaceted challenges to organisations.

While data breaches and denial-of-service attacks traditionally had a limited impact on credit ratings, recent trends highlight their potential to significantly affect an issuer’s creditworthiness. Failure to implement robust risk management measures can expose financial technology companies, especially those reliant on sophisticated software, to heightened credit risks.

Given the inevitability of cyberattacks, entities must proactively mitigate risks and bolster their cyber defence capabilities. This involves cultivating a security-conscious workforce through comprehensive training and fostering a cyber-secure work environment for all staff members.

Effective access controls are critical to mitigating human error and minimising vulnerabilities that could compromise digital assets. Furthermore, the growing reliance on cloud computing and software as a service introduces new risks associated with third-party providers. To address this, suppliers must maintain updated security protocols to safeguard against emerging threats.

The SolarWinds breach serves as a poignant reminder of the far-reaching consequences of third-party vulnerabilities. This breach, which occurred in late 2020, underscored the importance of transparency and accountability in cybersecurity practices. Issuers are expected to implement robust vendor management policies to mitigate credit impacts arising from third-party risks.

Amidst the evolving cyber threat landscape, Issuers must continuously review and update their policies, guidelines, and organisational culture to stay resilient. In addition to in-house defence measures, insurance can serve as a valuable risk transfer mechanism, providing an added layer of protection against cyber-related liabilities.

By prioritising proactive risk management and fostering a culture of cybersecurity awareness, entities can navigate the complexities of cyber threats while safeguarding their creditworthiness in an increasingly digital world.