From Scores to Strategy: The Next Era of Cyber Risk

From our series of posts: Scan Is the Limit, Episode 1

Cybersecurity has long been a game of visibility: knowing what threats exist, where vulnerabilities lie, and how attackers operate. External scanning tools have become an industry staple, offering organizations rapid assessments of their external exposure. Companies like Bitsight, Security Scorecard, Cysmo, and others have set the benchmark for evaluating security posture, making cyber risk assessment more accessible and standardized. Their success and footprint highlight the critical need for visibility and benchmarking. As of today, outside-in scans are top of mind for any corporate or insurer in need of a snapshot of cyber risk posture to drive decisions.

However, cybersecurity is an increasingly strategic topic for C-Levels who engage into governance and decision-making process and therefore demands more than surface-level insights. To make informed, data-driven decisions, businesses and insurers need a deeper, more dynamic approach—one that ties holistic cyber maturity to financial impact. This is where Cyber Risk Quantification (CRQ) steps in, aiming to fill the gap between the exhaustiveness of qualitative cyber assessment and the actionability of cyber risk metrics. Yet, despite its potential, CRQ has not always been seen as an obvious solution. It can seem complex, heavy, and difficult to operationalize. The challenge now is to demonstrate its practicality and value in a clear, actionable way.

Cyber Rating 1.0: The Limits of Traditional External Scanning

External scanning solutions have revolutionized cybersecurity by making it easy to assess an organization’s external footprint. Security ratings offer a snapshot of a company’s exposure, often in a format as simple as a score or a letter grade. While valuable, this approach—Rating 1.0—has inherent limitations:

• One Size Fits All: Many rating models apply a universal scale, failing to account for threat intelligence, industry-specific risks and/or business contexts.

• Can’t Compare an A with a B: Many decisions require assessing whether a “high risk business unit” is twice or thrice as severe as a “medium risk business unit”, or which company to underwrite between several B-rated prospects.

• Lack of Correlation with Overall Maturity: A strong external security score, which has been the focus of CISOs for some time now, does not necessarily mean a company is resilient to cyber threats. Internal security posture and operational dependencies matter.

• Half of the Picture: Traditional ratings often assess only technical vulnerabilities, overlooking financial consequences and strategic risk exposure.

• Limited to Yes/No Decisions: They provide a binary view of risk, forcing organizations to make go/no-go decisions without nuance.

• A Sum of Individuals: Ratings often evaluate companies in isolation, without considering their role within a broader supply chain or industry ecosystem.

• Clean Room Approach: External scanning tools operate from an outsider’s perspective, making assumptions without access to internal security controls or compensatory measures.1

Cyber Rating 2.0: The Future of Cyber Risk Quantification

To move beyond the limitations of traditional ratings, organizations need a new approach—Rating 2.0. This next-generation model integrates cybersecurity with financial risk management, breaking silos and enabling organizations to quantify cyber threats in economic terms. However, CRQ has sometimes been perceived as intimidating or overly complex. The key to unlocking its value is to make it more accessible, showing how it can provide clear, actionable insights rather than just another layer of complexity. Here’s how:

• Real World Scenarios: Cyber risks are dynamic. A rating system must evolve alongside emerging threats, adapting to new attack vectors, victimology patterns and business realities.

• Money Talk: Cybersecurity is no longer just an IT issue—it’s a financial one. CRQ translates technical risk into monetary impact, enabling executives and insurers to make informed financial decisions.

• Full Picture: True cyber resilience requires assessing both external exposures and internal security measures, combining technical insights with business context.

• Problem Solving: A risk quantification approach should not just tell businesses they have a problem—it should tell them how to solve it and what the return on security investment will be.

• Part of a Whole: The interconnected nature of cyber risk means that isolated ratings fail to capture systemic vulnerabilities. CRQ accounts for risk accumulation across supply chains and business ecosystems.

Combining External Scans with Holistic Cyber Risk Evaluation

Citalid’s risk evaluation method is comprehensive, integrating multiple sources of cyber risk assessment:

• External scans for weak signals, technology detection and benchmarking.

• Questionnaires to capture governance and business-specific cybersecurity insights.

• LLM-supported documents processing – allowing unstructured information inputs to maximize time efficiency.

• Internal connectors (cloud environments) for real-time security monitoring.

• Financial loss abacuses to contextualize risk in monetary terms.

While external scans provide scalable, automatic, and dynamic assessments, they are not enough on their own. By integrating them with other sources of cyber risk data, Citalid offers a more complete picture of an organization’s exposure.

The Role of Questionnaires in Cyber Risk Assessment

Questionnaires play a crucial role in capturing internal security maturity and governance practices—elements that external scans cannot evaluate. These insights are essential for identifying weaknesses that may otherwise be overlooked. In one real-world example, a local CISO had strong external scan results, showing apparent maturity from the outside. However, the provided responses to a security questionnaire disclosed a pretty low defense maturity. Citalid’s risk analysis helped uncover discrepancies, leading to a more accurate assessment of the company’s cybersecurity posture.

From Assessment to Rating: The Role of Citalid

At Citalid, we believe cyber risk should be measured like financial risk. Just as rating agencies assess creditworthiness, we provide a dynamic, intelligence-driven approach to cyber risk quantification. However, we also recognize that CRQ must be presented in a way that is accessible and actionable. Our platform moves beyond static security scores to deliver practical insights that bridge the gap between cybersecurity and finance. By combining external scanning with CRQ, we enable organizations to:

• Understand the financial impact of cyber threats

• Make data-driven investment decisions in cybersecurity and insurance

• Align security strategies with business risk management

• Provide insurers with accurate, risk-adjusted pricing models

• Ensure transparency in the cyber value chain to understand and trust results

This approach helps organizations optimize investment decisions, model security and insurance investment roadmaps, assess ROI, and calibrate budgets. In one case, a client used CRQ to justify cybersecurity investments after a management change threatened to cut budgets. By quantifying the cost of inaction, they successfully secured funding for critical security initiatives.

What’s Next: A Series on Cyber Risk Financialization

This foundational blog post is just the beginning. Over the next few weeks, we’ll be diving deeper into:

1. The Financialization of Cyber Risk: Why cybersecurity should be treated as an economic challenge, not just a technical one.
2. Beyond Ratings: How Cyber Risk Aggregation Changes the Game: Exploring the role of interconnected risks and systemic vulnerabilities.
3. Actionable CRQ: Making Cyber Risk Decisions That Matter: A deep dive into how organizations can translate cyber risk data into strategic action.

The cybersecurity industry is at a crossroads. External scanning remains a critical component, but it must be part of a larger ecosystem that connects security insights to financial decision-making. With Cyber Risk Quantification, Scan is the Limit—but true cyber resilience goes far beyond.

Are you ready to move from Rating 1.0 to Rating 2.0? Let’s start the journey together.