The credit rating bureau Moody’s published in 2022 a research report telling that 28% of their 80 trillion USD credit rating portfolio, equal to 22 trillion USD of debt has a HIGH to VERY HIGH cyber risk exposure.
A case study by Protectoria tells that by improving the HIGH to VERY HIGH cyber risk exposure to LOW and MODERATE cyber exposure of the overall public debt credit rating can be directly converted to lower interest payments and therefore improve public budgets.
The study suggests that some government projects just 6 months after full enrollment towards a safe digital transformation infrastructure can be self-financed, and thereafter highly profitable by significantly improving the public debt interest rate by lowering the cyber risk exposure.
Improvements above this level might be pure profits on public budgets which is a necessity in times where increasing global debt interest rates are stressing all governments, especially those in low income and emerging markets.
Ref: https://www.bitsight.com/blog/moodys-22-trillion-debt-has-significant-cyber-risk-exposure
The credit rating bureau Moody’s published in 2022 a research report telling that 28% of their 80 trillion USD credit rating portfolio, equal to 22 trillion USD of debt has a HIGH to VERY HIGH cyber risk exposure.
Because Moody’s represents 1/3 of the total rating of approx. 249 trillion of debt (including S&P and Finch ratings), the actual worldwide cyber exposure of debt is closer to 70 trillion USD or 67% of the global GDP of 105 trillion USD, according to World bank.
Compared with the global GDP of 105 trillion USD, we conclude that the 70-to-105 weight of cyber risk exposure becomes a more and more significant impact factor on credit ratings.
Consequently, lending costs increase the more the emerging (and systemic) cyber risks increase, risk controls become exhausted and cyber insurance becomes obsolete for most of the customers worldwide, but especially in low income and emerging markets. The real cost of cybercrime worldwide will reach 8.15 trillion USD in 2023, which underpins the emergency situation.
There are nowhere to hide anymore, but to fix the problem by building a strong security foundation of the digital transformation, that so far in the business world has suffered from having real economic incentives aligned with security quality, sufficiently mitigating the systemic risks of cybercrime.
But if cyber risks are managed well, as suggested through the Protectoria innovative ID-as-a-Service and risk management model, see below, better credit rating reduces lending costs and will pave the way for a direct correlation between investments in high security quality and profitability.
Protectoria suggest that governments, especially those in low income and emerging markets, will have an all-time high opportunity to improve public finances and profitability reducing their cyber exposure as part of their credit rating.
A case study tells that by improving the HIGH to VERY HIGH cyber risk exposure to LOW and MODERATE cyber exposure of the overall debt credit rating can be converted to lower interest payments.
The math is simple. By investing in the right decentralized cyber resilience services, starting with implementing the digital identity layer of public and private sector services, a safe and less risky transition to the digital economy comes with a surprisingly large benefit:
Some government projects will just 6 months after full enrollment be self-financed with as little as 9 basis points, and thereafter become highly profitable by significantly improving the public debt interest rate through improved credit rating through better cyber resiliense and lesser exposure to cybercrime.
In addition comes all the other financial and structural benefits of secure digital transformation.
For more information, on what, how and why this is possible, please download our Protectoria Venture Business Whitepaper version 1-1 here:
