Companies with good cybersecurity outperform the market

The risk of cyberattack and loss of data is very real for all companies and it's something that's starting to be a concern for investors too.

New research from security ratings company BitSight and Solactive, a German index engineering firm, shows that company's cybersecurity performance is an indicator of its business performance.

The study shows that indices composed of well-performing BitSight-rated companies outperform their respective benchmarks by one to two percent annually. For certain sectors, such as US technology, well-rated companies outperform the benchmark by seven percent per year.

Until now, investors have primarily thought of cybersecurity as a risk to their portfolios; research shows that share prices on average fall 7.27 percent in a two-week period after a publicly disclosed breach. This shows that investing in strong cybersecurity performers can actually deliver higher returns.

The research has been released to coincide with the launch of the Solactive BitSight Cyber Risk Index, a financial index that will enable investors to select companies which are top cybersecurity performers, as measured by BitSight.

The Risk Index helps investors factor cyber risk into their investment decision-making. By continuously and non-intrusively collecting cybersecurity performance data on global organizations, BitSight provides objective and validated analytics, while avoiding the data collection challenges typically associated with Environmental, Social and Governance (ESG) investing.

"BitSight is powering a new era, where cyber risk is integrated into every market decision and strong, measurable cybersecurity performance is a market differentiator," says Steve Harvey, chief executive officer at BitSight. "This unprecedented research based on BitSight's unique data will not only affect investors' views on cybersecurity, but also the way that C-suite and security professionals manage and measure cybersecurity performance inside of their organizations. For BitSight, this is another independent, statistical validation of our market-leading Security Ratings, further cementing the reason why the global marketplace -- investors, insurers, governments, and businesses -- trust and use the BitSight platform."

You can read more about the research on the BitSight blog.

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