Bitsight for investment management

Bitsight is the leading provider of cyber governance data.

Cybersecurity is a critical risk that can materially impact a company’s bottom line. Unfortunately, investors are largely in the dark when it comes to understanding the cybersecurity of the companies in which they invest. Though widely recognized as a key component of governance, there is a lack of disclosure as it relates to cybersecurity investment, policy, and readiness from companies in general.

Updated daily, Bitsight Security Ratings are designed to continuously assess the likelihood of data breach and measure how effective an organization is at managing their cybersecurity environment, in an evidence-based, quantitative manner.

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Investment Management Partners

Identify cyber risk, make more informed investment decisions, and boost returns.

Identify and manage cyber risk across your portfolio

Leverage security ratings as a proxy for governance

Generate alpha with cybersecurity performance data

Factor governance effectiveness into your stewardship strategy

investment management correlation to stock performance

Asset management.

Alternative data from Bitsight arms asset managers with continuous visibility into the cybersecurity performance of issuers — driving stock selection and risk management decisions.

Solactive, a German index engineering firm, found that companies in the top 25% of Bitsight ratings performance outperform the Solactive benchmark index with excess returns of 1% to 7% on an annualized basis, and lower volatility.

Additionally, IHS Markit found that there is a causal relationship between the company’s cybersecurity readiness – manifested in a higher Bitsight / IHS Markit rank – and their equity performance. Per their research, the 37 highest performers with a top rank of 1 offered more attractive valuation multiples than the 35 businesses that were ranked at the bottom.

Corporate governance and oversight.

Bitsight Security Ratings translate complex cybersecurity issues into simple business context — reducing information asymmetry and enabling better decisions.

Glass Lewis partners with Bitsight to include critical cybersecurity information – comprised of Bitsight Security Ratings, data, and insights – in Glass Lewis’ Proxy Paper research reports. Information enables investors to better assess how cybersecurity issues may affect their investments.

ESG

(environmental, social, and governance)

Effective cybersecurity management is indicative of effective overall company management. Utilize Bitsight Security Ratings data as a proxy for governance when evaluating companies within an ESG framework.

Fidelity Investments

Cybersecurity: A Growing Risk Report

“At Fidelity, we view cybersecurity as a material consideration across its proprietary environmental, social, and governance (ESG) research and ratings. For example, within the “E,” cyberthreats are relevant to drinking water and wastewater systems that are infrastructure-intensive; in the “S,” lax supply-chain management can hurt data security; and in the “G,” cyberattacks can disrupt business operations, hurt share prices, and threaten management.” (source)

Proven, third party validated correlations to cyber attacks.

Correlation to Likelihood of Data Breach
Bitsight is the only Security Rating Service provider with a third-party validated correlation to breach. As validated by AIR Worldwide and IHS Markit, companies with a Bitsight Security Rating of 500 or lower are almost five times more likely to suffer a breach than those with a rating of 700 or more.

Correlation to Likelihood of Ransomware Event
Bitsight’s research shows that organizations with a rating lower than 600 are 6.4 times more likely to be a ransomware victim compared to organizations with a rating of 750 or higher. Organizations with a rating between 600 and 650 are 4.6 times more likely.

Investment management partners.

Moody's

In September 2021, Bitsight established a strategic partnership with Moody's Corporation to create a first-of-its-kind integrated cyber risk platform, with Moody's leveraging Bitsight's best-in-class cybersecurity ratings and analytics across its growing suite of integrated risk assessment product offerings.

Glass Lewis

IHS Markit

IHS Markit partners with Bitsight to provide asset managers with critical cybersecurity intelligence on organizations worldwide. The Research Signals Cybersecurity Factors datasets contain a suite of 35 factors that quantify cybersecurity risks to enhance stock and portfolio risk management. Factors include: the key Bitsight Rating, 18 scores from the Bitsight risk vectors, and 16 derived factors measuring changes and volatility in ratings, z-scores, industry and sector positioning and impact of data breaches.

S&P

S&P partners with Bitsight to provide an alternative dataset that offers insight into the cybersecurity posture and risk of individual business partners, insurance clients, or portfolio companies. Seamlessly access the linked and structured dataset via Snowflake. Compare cyber risk trends and relative positioning of companies within an industry and create watch lists.

Solactive

The Solactive Bitsight Cyber Risk Index family helps investors factor cyber risk into their investment decision-making, serving as a leading benchmark for only the best cyber-secure companies. The indices can serve as the underlying for index-linked products such as ETFs or structured products.

Resources

Guide

NEW!

Cyber Risk: The New Frontier in Investment Decision Making

Guides

Research

Make Better Cybersecurity decisions with Trusted Data

The Marsh McLennan Cyber Risk Analytics Center Study

Research