The Cyber Risk Of Non-Financial Firms

Francesco Columba, Manuel Cugliari (), Marco Orlandi () and Federica Vassalli ()
Additional contact information
Manuel Cugliari: Bank of Italy
Marco Orlandi: Bank of Italy
Federica Vassalli: Bank of Italy

No 75, Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) from Bank of Italy, Directorate General for Markets and Payment System

Abstract: We build a novel indicator of cyber risk vulnerability for Italian non-financial firms applying natural language processing and a large language model to information extracted from financial statements, news, and cyber industry reports. The indicator is based on a taxonomy tailored to the Italian case, that addresses dimensions of cyber risk that so far have not been considered within a unified methodological framework. The new taxonomy captures both the occurrence of cyberattacks and the presence of the associated defensive measures, such as the regulatory compliance, technological defences, and certifications for a large and heterogeneous sample of firms. We find that since 2019 a sizable share of firms has experienced an increase in frequency and heterogeneity of cyberattacks. Firms appear highly vulnerable: the impact of a cyber incident on the vulnerability index in the aftermath of the attack outweighs the mitigating effects of the defensive actions, which require some time to become effective. Also, we observe that firms tend to increase cyber-related information in official reporting following an attack. These findings warrant the integration of cyber risk into credit risk models.

Keywords: credit risk; cyber risk; artificial intelligence; large language models (search for similar items in EconPapers)
JEL-codes: C52 C55 G24 G32 (search for similar items in EconPapers)
Date: 2026-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/mercati- ... 26-075/N.75-MISP.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdi:wpmisp:mip_075_26

Access Statistics for this paper

More papers in Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) from Bank of Italy, Directorate General for Markets and Payment System Contact information at EDIRC.
Bibliographic data for series maintained by ().