A new report from Standard & Poor’s Ratings Services has found that due to the increased frequency of large cyber attacks against companies like Home Depot, Target, Sony, JPMorgan Chase, Anthem, and Premera Blue Cross, cyber risk is a growing source of concern in the assessment of credit quality.
S&P said that from a ratings standpoint, “post-attack reparations pose the greatest risk to credit quality in our view, although they have been modest so far. Business disruption, adverse legal outcomes, and loss of reputation are among myriad potential consequences. The most likely adverse ratings impact would stem from an attack weakening a target company’s business profile, most likely in terms of future revenue and profitability, and by causing deterioration in credit metrics.”
S&P reports that effective response plans, which are examined as part of corporate governance and enterprise risk management, is probably the best differentiator.
They have indicated that “among the financial services companies we rate, the many successful cyber attacks haven’t yet resulted in any changes to our ratings. At the same time, we believe cyber threats could soon pose a higher credit risk to the industry, as we stated in – ‘U.S. Financial Services Credit Ratings Are Resilient To Cyber Security–For Now’ – also published today.”