What Are Security Ratings? A Complete and Authoritative Guide

Security Ratings Historical Performance Graph

With cyber attacks skyrocketing, security managers are experiencing top-down pressure from external stakeholders (such as investors, regulators, and insurers), as well as internal stakeholders (including board members and senior executives). These stakeholders want teams to demonstrate how they are performing and the financial risks to the organization. A security rating is an objective, trusted way to assess the overall security performance of an organization and make impactful decisions about your cybersecurity program.

According to Gartner, security ratings provide “independent scoring and rating for enterprises… They gather data from public and private sources via non-intrusive means, analyze the data, and rate security using proprietary scoring methodologies.” Security ratings, or cybersecurity ratings, are a data-driven, objective, and dynamic measurement of an organization’s security performance, providing a comprehensive view of overall cybersecurity posture.

But not all security ratings from various vendors are the same. Some may measure a single point-in-time, or an organization’s exposure in the moment. Others, such as the Bitsight Security Rating, assign a rating based upon an organization’s ongoing program performance over time. In this guide, we will explore how the Bitsight Security Rating differs and how the data behind that rating shows companies how to improve their cybersecurity posture, hygiene, and cyber risk.

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What Is The Difference Between Security Ratings?

As the pioneer security rating, The Bitsight Security Rating is a quantitative metric that gives teams a simple indicator of the organization's security performance over time. Security leaders leverage our security rating to gain immediate insight into making impactful security performance decisions, improving cybersecurity controls, and understanding a data-backed view of cyber performance.

A Bitsight Security Rating is similar to that of a credit rating; if someone missed a credit card payment, their credit score would take a hit and need time to recover. Similarly, the Bitsight Rating measures performance over time to have a more holistic view of cybersecurity hygiene and encourage a continuous improvement strategy.

This approach is why the Bitsight Security Rating is the world’s most trusted and utilized security rating. It is the only security rating highly correlated with critical business outcomes, including data breaches, ransomware attacks, and company stock performance. Thousands of organizations around the world—from investors to insurers to government agencies to companies of all sizes—use Bitsight Security Ratings to make more effective decisions about cyber risk management.

Security Ratings as the Foundation for Cybersecurity Strategies

The Bitsight Security Rating creates the foundation for security teams to manage cyber risk both internally and externally throughout their extended ecosystem. Ratings range from 250-900, with a higher rating indicating better overall security posture.

But the true value of the Bitsight Security Rating is all the data and analytics behind it; Bitsight collects more than 250 billion events from over 40 million organizations daily to provide organizations unique visibility in making better, smarter risk decisions. Armed with this data, teams measure and continually manage internal security performance through:

  • Improved Visibility: Understand the security performance across all subsidiaries, business units, and geographic locations. See the state of each control, track progress over time, and get recommendations for remediation.
  • Continuous Controls Monitoring: Measure the effectiveness of security controls and continuously monitor your security performance. Bitsight enables teams to gain insight into the state of each control and track progress over time.
  • Advanced Cybersecurity Analytics: Inspire confidence with stakeholders by communicating meaningful metrics in context with cybersecurity performance.

The data and analytics behind the Bitsight Security Rating sheds light in third-party interactions where transparency has historically been lacking, such as:

  • Third-Party Supply Chain Risk Management: Understand the risk posed by any third-party or supply chain business relationship. Facilitate vendor risk management and drive efficiency across the ecosystem. Quickly and effectively communicate current and historical changes in risk across the vendor portfolio and conduct vendor evaluations.
  • Cyber Insurance: Whether an entity is a cyber insurance applicant or a policyholder, Bitsight Security Ratings enable teams to improve underwriting coverage and pricing, monitor portfolio performance, aid in loss control, and strengthen the value brokers bring to their clients.
  • Mergers & Acquisitions: When considering new investment or M&A targets, gain a better view into cybersecurity due diligence and continuously monitor performance.
  • Government: Discover, monitor, and manage cyber risk within expansive government supply chains or throughout critical infrastructure.

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Security Ratings with Security Performance Management

Security teams are on the frontlines working to build highly resilient cybersecurity programs. While workflows like questionnaires and tools for network security can help companies understand their performance, they only provide a point-in-time reference to security performance. Bitsight’s data and analytics provides insight not only into how an organization is performing today, but also gives insight into performance over time. This allows security leaders to understand areas of strength and areas for improvement.

Bitsight for Security Performance Management (SPM) helps security teams continuously monitor and manage security performance. Teams leverage SPM to lower risk, improve assurance, and manage a strong cybersecurity program. Every day, organizations trust the insights that Bitsight provides to streamline program decisions, monitor security control effectiveness, compare against peers, communicate program performance, and set uniform performance targets.

Security teams rely on Bitsight for SPM for three key jobs:

  1. Governance. Drive accountability across the organization and establish standards according to individual risk appetites. With insight into peer performance, companies can set performance targets in alignment with their unique goals. Align investments and actions with the highest measurable impact for the cybersecurity program over time.
  2. Management. Leverage continuous controls monitoring to understand security control effectiveness and set performance targets. Implement remediation process workflows, deliver comprehensive views of the extended digital footprint, and facilitate day-to-day management. Efficiently and dynamically allocate your team’s limited resources on the most critical areas of cyber risk.
  3. Assurance. Communicate program performance with the Board of Directors, executive leadership, investors, and customers. Facilitate data-driven, risk-based conversations about cybersecurity by delivering easy-to-understand program KPIs.


Security Rating with Third-Party Risk Management

With vendor ecosystems and digital footprints growing, it’s becoming increasingly important to understand inherent cyber risk exposure. Cyber risk assessment questionnaires are subjective, and quickly become outdated shortly after they are submitted. Processes like onboarding a new vendor, assessing existing third-parties, and communicating security performance oftentimes get lost in unclear data and complicated reports.

Bitsight’s Security Ratings complement traditional risk management methods by providing continuous, objective, and actionable data. Bitsight for Third-Party Risk Management (TPRM) empowers vendor risk managers to simplify and enhance their processes through continuous monitoring, quantifying the cyber risk of their third parties. By understanding the Security Rating—and inherent cyber risk—of third-parties, security teams get a simple snapshot of an organization’s security posture. This objective, evidence-based method facilitates vendor risk management and drives efficiency, while making it easy to track performance over time.

Security teams rely on Bitsight for TPRM for three key jobs:

  • Vendor Validation: Confidently maintain risk tolerance at scale to make decisions quickly and effectively. Through methods such as vendor tiering and vendor risk management (VRM) integrations, security teams can quickly evaluate vendors and prioritize decisions. Additionally, Bitsight offers a variety of integrations with companies like OneTrust, ServiceNow, and ThirdPartyTrust to identify and manage risk with vendors.
  • Continuous Monitoring: Get continuous visibility into third-party vendors and collaborate more easily with real-time analysis to identify risk as it happens, streamline efforts for remediation, and gain insights into your fourth-party ecosystem.
  • Assurance: Measure how the vendor portfolio performs and communicate program performance to stakeholders. Gain meaningful insights into breach and ransomware probability, comprehensive reporting capabilities, and validated metrics into company stock price performance.


Security Ratings with Cyber Risk Quantification

Although Cyber Risk Quantification (CRQ) is still relatively new in the cybersecurity market, many security teams are looking for ways to prioritize risk areas and inform cybersecurity investments using financial outcomes to justify decisions. Many teams may hesitate to invest in CRQ because it traditionally requires a hefty investment that doesn’t produce timely results.

Bitsight’s Financial Quantification for Enterprise Cyber Risk complements the Security Rating, providing insight into an organization’s financial exposure to cyber risk.. The combination of Financial Quantification and the Bitsight Security Rating provides teams insights into an organization’s assets and security posture to simulate financial impact across multiple cyber scenarios. As an add-on to SPM, it provides an efficient and easily repeatable way to quantify cyber risk financially.


How are Bitsight Security Ratings Calculated?

Bitsight’s founders drew inspiration from successful ratings systems such as consumer credit auto & home insurance, and restaurant food safety to build the cybersecurity ratings industry. Today, The Bitsight Security Rating is built around trusted, transparent data.

The platform applies sophisticated algorithms to calculate an organization’s security rating. For a detailed explanation of this process, review our comprehensive ebook. At a high level, the process includes four steps:

  1. Collect Data: Bitsight collects billions of externally observable events daily from over one hundred data sources.
  2. Research & Assign: Using our patented human and automated mapping process, Bitsight provides a 12-month history for all rated entities.
  3. Filter & Process: Bitsight distills the data points into 23 risk categories, weighing them between compromised systems, diligence information, and user behavior.
  4. Calculate Ratings: From this information, Bitsight then computes an overall rating on a scale of 250-900, assigns letter grades to the 23 risk vectors, and normalizes ratings based on the size of the organization.

How are Bitsight Security Ratings Governed?

While Bitsight is confident in the accuracy and objectivity of our Security Ratings, any organization has a right to understand and dispute their rating. If a company wants to appeal their rating, they may follow Bitsight’s formal dispute resolution process, overseen by the Bitsight Policy Review Board (PRB).

The PRB is a committee that governs the ratings algorithm and associated policies, and also adjudicates appeals related to data accuracy and evaluation methodology. The dispute resolution process includes:

  • Disputing data and findings
  • Disputing ratings and calculations
  • Managing appeals and adjudication

Why You Should Trust Bitsight Security Ratings

What started in 2011 as a way to create a credit score for cyber risk has exploded into a core component of cybersecurity programs for companies around the world to manage, measure, and understand their security posture and the posture of the entities they do business with. Today, over 42,000 users at over 3,000 companies trust Bitsight’s data to make better, smarter risk decisions. The Bitsight Security Rating is the only rating independently correlated to data breaches, ransomware attacks, and company stock performance. And, Moody’s invested $250 million and partnered with Bitsight to deliver an integrated cyber risk platform using our ratings and analytics.

Andrew Bullen
Senior Manager, Governance, Risk and Compliance, HBF Health Limited

By consolidating all security vectors (both known and unknown) onto a single pane of glass, we have gained valuable insights into potential security gaps. Bitsight is a key partner in helping us consistently reduce third-party vendor risks cost-effectively, while providing additional optics for us to drive our security resilience.

What Is the (Brief) History of Bitsight Security Ratings?

In 2011, Bitsight’s founders Stephen Boyer and Nagarjuna Venna pioneered the security ratings industry to help the global marketplace better understand, measure, and quantify cyber risk. They created a “credit score” for cyber risk that would be a credible, predictive, scalable, and principally automatable scoring methodology.

Today, the Bitsight Security Rating is known around the world as a trusted analytic to help organizations understand and manage cyber risk. With several acquisitions including Security Intelligence Company AnubisNetworks and VisibleRisk, along with key partnerships with Glass Lewis and Moody’s, Bitsight works to actively combat cybersecurity threats in ways that work for its customers.