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Managing cyber risk is challenging for any organization. From understanding current business exposure to managing emerging threats to measuring the impact of risk mitigation efforts and communicating with the board of directors - it is no mean feat.
For private equity firm CISOs, the complexity gets multiplied several times over as a result of the dynamic nature of private equity investments, the diverse range of portfolio companies, and the often complex financial structures involved. CISOs dedicate their working days to juggling cyber exposure challenges, board meetings, and cyber improvements across the portfolio. Time is at a premium, with the need to balance cyber effectiveness and cyber risk efficiency.
To do this, they need access to advanced cyber insights delivered through a business lens.
Here, we explore how private equity firms can adopt an optimal approach to portfolio cyber risk management. This approach must provide visibility across the full portfolio, highlight the exposure areas that present the greatest business risk, and support them in making a significant business impact over a short period.
Attaining a comprehensive view of cyber exposure is a challenge for almost every CISO. Cyber risk isn’t a static number. Company valuations, asset values, emerging threats and new risk management measures mean that this is a constantly evolving matrix to keep abreast.
For advisory CISOs at private equity firms, the challenge they face is even greater. They need comprehensive visibility across their entire portfolio. To achieve this, they need a solution as dynamic and sophisticated as the challenge they need to overcome.
This is where X-Analytics helps. X-Analytics provides advanced cyber risk analytics and data-driven insights designed by and specifically for PE Firm CISOs. CISOs can view current cyber exposure levels across their portfolio and identify which areas need to be prioritized for investment and risk reduction measures. They can easily unlock the business value of their cyber risk assessments without needing to undertake a multi-year project or enlist a costly consultancy firm.
Adopting a strategic approach to cyber risk management is critical for private equity firms. In some cases, attaining a level of cybersecurity maturity that is ‘good enough’ is good enough. This requires a refined balance of making the right investment in cybersecurity so that the cyber risk management program moves the needle in a meaningful way, without over-investing.
To achieve success, the CISO needs to be able to understand which areas of cyber exposure need to be addressed with the most urgency, what investment is required to reduce their risk to an acceptable level, and what impact that will have on their overall cyber risk.
CISOs can also use X-Analytics to create an optimal cyber investment plan achieving target results . For example, if they had $10mil to invest, they could see the impact that implementing new risk mitigation measures would have on their cyber exposure and the value this could deliver to the business. X-Analytics ensures that they're able to make strategic decisions to reduce their cyber risk across their portfolio quickly and with optimal efficiency.
With so many moving parts across the portfolio, effective cyber risk governance is critical, especially at the board level. The CISO needs to work closely with the board to communicate their portfolio’s current cyber exposure level, determine what level of investment is required to reduce this and start working towards reaching a mutually acceptable level of cyber risk.
Fortunately, cybersecurity is firmly on the agenda for board members, according to the Q2 2024 NACD report. The challenge CISOs now face is communicating cyber risk in a way that non-cybersecurity professionals understand and makes the case for investing in cybersecurity. In order to achieve this, they need to:
A key objective for private equity advisory CISOs is delivering cybersecurity ROI across the portfolio without the need for multi-year projects or superfluous investment. They need a way to continuously measure the impact that their cyber risk management strategy is having on their risk level, both on an individual company and portfolio level.
X-Analytics provides continuous reporting capabilities which allow CISOS to track progress over time, see the impact of emerging threats on their portfolio’s exposure and demonstrate the ROI of your cyber risk management strategy.
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Leading private equity firms already use X-Analytics to manage cyber risk across their portfolio and achieve significant business success in doing so. Here’s how one of our private equity customers transformed its cyber risk management strategy with X-Analytics.
A major private equity firm with a diverse portfolio with assets spanning multiple industries and geographies.
Effectively managing their cyber risk across their complex portfolio was proving challenging.
Their existing approach to cyber risk management was fragmented, with different portfolio companies employing varying levels of security measures and risk assessment protocols.
Recognizing the need for a more unified and effective approach, the firm turned to X-Analytics. They leveraged X-Analytics to provide a holistic view of cyber risk across their portfolio, identifying their exposure areas and what risk mitigation measures would deliver the most business value.
X-Analytics is having a transformative impact on the firm’s cyber risk management strategy and achieved a substantial reduction in cyber risk exposure. By effectively managing and mitigating potential threats, the firm not only safeguarded its assets but has realized a cyber risk reduction of over $20 million per portfolio company - exceeding $1 billion across the combined portfolio.
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