Lenders are taught to approve loans based on the 5 C’s of credit (character, capacity, capital, collateral and condition). But cybersecurity threats are increasing in speed and sophistication, and all businesses and industries are at risk. Has your bank considered the 6th C of credit - cybersecurity risk?
Your business customers are a prime target for cyber criminals. If their operations are crippled due to ransomware or some other type of cyber attack, this will significantly impact their ability to repay your loan.
This is such a large concern across the financial services industry that FICO has created a tool called the Assessment of Business Cyber Security, also known as (ABC). The score determines the cybersecurity risk of a business or industry using a score with a range similar to a credit report. While a credit scoring agency may not have the necessary information to calculate a cyber risk score for your borrowers, this is another important risk you should assess.