Demonstrating your return on cybersecurity investment to investors, boards, and top managers is one of the hardest challenges a CISO faces. Yet ROSI (Return on Security Investment) has become a non-negotiable KPI — especially since the SEC’s 2023 cybersecurity disclosure rules now require public companies to report board oversight of cyber risk.
An entire scientific discipline of cybersecurity economics exists to research the best ways to invest in security. Rather than constructing a ROSI formula from academic material, this guide shares practical, board-ready methods for demonstrating cybersecurity investment value — updated for 2026 with the latest frameworks, insurance market data, and regulatory requirements.
Why Demonstrating Security ROI Is So Difficult
Unlike software features or marketing spend, cybersecurity success is invisible. Investments in features, marketing, and sales produce measurable outcomes — revenue growth, user satisfaction, market share. But the point of investing in security is to prevent something from happening. When nothing happens, how do you prove your investment worked?
This “absence of evidence” problem is precisely why CISOs need structured approaches. The good news: modern frameworks and regulatory pressure have made this significantly easier than it was even two years ago.
Frameworks for Measuring Cybersecurity ROI
Before diving into practical indicators, it’s worth knowing the established frameworks that give your ROSI calculations credibility with boards and auditors.
NIST Cybersecurity Framework 2.0
Released in February 2024, NIST CSF 2.0 added a new “Govern” function that explicitly ties cybersecurity risk management to enterprise risk management. The accompanying CSF Tiers guide (SP 1302) provides a maturity scale (Tier 1 through Tier 4) that boards can use to track program progress over time — a concrete metric for ROI conversations.
NIST IR 8286A (Revised December 2025)
The most recent official guidance on estimating cybersecurity risk for enterprise risk management strengthens the methodology for converting cyber risk into financial terms. This document provides the bridge between technical security metrics and the financial language boards understand.
Open FAIR (Factor Analysis of Information Risk)
Open FAIR remains the dominant quantitative risk analysis standard for expressing cyber risk in economic terms — loss magnitude and loss frequency. If you need to build a defensible ROI business case with actual numbers, FAIR is the methodology most widely accepted by risk committees and insurers.
5 Practical Indicators of Return on Security Investment
1. Everyone Gets Hacked and You Don’t
This is the simplest ROSI indicator: if your company’s annual loss from cybersecurity incidents is zero while your industry peers suffer breaches, your investment speaks for itself. Ransomware attacks continue at record levels, and if there is a vulnerability in your defenses, you may already be compromised without knowing it.
The cost of an incident extends far beyond immediate revenue or data loss. Long-term consequences include reputation damage, regulatory fines (particularly under GDPR and NIS2), customer churn, and higher insurance premiums. According to industry data, the average cost of a data breach has continued to climb year-over-year, exceeding $4.8 million globally in 2024.
If your organization has avoided major incidents over multiple years while operating in a high-risk sector, that is measurable evidence your cybersecurity consulting and strategy is working.
2. You Look for Signs of Compromise and Find None
Proactive threat detection is another powerful indicator. If you pay close attention to cybersecurity events across your applications, systems, and networks — and consistently find no indicators of compromise — that silence is meaningful.
The critical prerequisite: you must have genuine visibility into your threat landscape. Threat management — collecting, aggregating, triaging, and analyzing security events — is an essential business process. Every company benefits from a Security Operations Center, but not every budget can afford one. Alternatives like canary tokens, honeypots, managed SIEM solutions, and endpoint detection tools can provide affordable threat visibility.
If your detection capabilities are properly configured, continuously monitored, and consistently quiet, that is a tangible return on your security investment. A well-implemented DevSecOps program can integrate these detection capabilities directly into your development and operations workflows.
3. You Pay Others to Hack You, and They Struggle
Hiring professional ethical hackers to challenge your defenses is one of the most direct ways to quantify security maturity. Penetration testing services simulate real-world cyberattacks and report exactly how well you detect and prevent them.
A capable pentesting team becomes your personal ROSI calculator. After receiving their report and implementing fixes, you see immediate measurable improvement. Over multiple engagements, you build a trend line that demonstrates progress to any board:
- Number of critical vulnerabilities found (trending down)
- Time to detect simulated attacks (trending down)
- Percentage of attack scenarios successfully blocked (trending up)
- Remediation time from finding to fix (trending down)
At some point, your pentesting partner may recommend graduating from standard penetration testing to more sophisticated red teaming exercises — a clear signal that your defenses have matured significantly.
4. You Pay Lower Cyber Insurance Premiums Than Your Peers
The cyber insurance market has transformed since 2022. According to Munich Re’s 2025 outlook, global cyber premiums are expected to more than double by 2030. Meanwhile, Marsh’s Q1 2025 data shows cyber insurance rates declining approximately 6% — but only for organizations that can demonstrate strong security postures.
Insurance underwriters now perform rigorous security assessments before issuing policies. Organizations with documented risk management programs, regular penetration testing, and incident response plans consistently receive better terms. If your premiums are stable or declining while industry averages rise, that delta is a direct, dollar-denominated return on your security investment.
Notably, UK cyber claims payouts jumped sharply in 2024, according to the Association of British Insurers, signaling that claims severity is rising even as rates soften. This divergence makes demonstrated security maturity even more valuable to underwriters.
5. When You Get Hacked, It Is Not the End of the World
Every security professional knows: the question is not if you get breached, but when. The real measure of your investment is what happens next. Organizations that invest in incident response preparedness recover faster, lose less data, and suffer less reputational damage.
A mature incident response capability means:
- Security operations detect and localize the incident within hours, not weeks
- Your incident response team engages immediately with established playbooks
- Employees know how to respond without panic
- Legal counsel has law enforcement contacts ready
- Communications and PR have pre-approved crisis messaging templates
- The red team integrates lessons learned into future exercises
The SEC disclosure rules now require companies to report material incidents within four business days. Organizations with rehearsed response plans meet this timeline comfortably. Those without scramble — and the market notices.
Board-Ready Metrics: What CISOs Should Report
Translating technical security work into business language is essential. Here are the metrics that resonate with boards and investors:
| Metric | What It Measures | Why Boards Care |
|---|---|---|
| CSF Maturity Tier (1-4) | Program rigor and capability | Shows progress over time |
| Mean Time to Detect (MTTD) | How fast threats are identified | Directly correlates to breach cost reduction |
| Mean Time to Respond (MTTR) | How fast incidents are contained | Limits financial and reputational exposure |
| Vulnerability Remediation Rate | % of findings fixed within SLA | Demonstrates operational discipline |
| Pentest Finding Trend | Critical findings per engagement | Proves defensive improvement over time |
| Insurance Premium Delta | Your rate vs. industry average | Dollar-denominated ROI proof |
| Compliance Coverage | % of regulatory requirements met | Reduces legal and regulatory risk |
Use NIST CSF 2.0’s Govern function as the organizing framework for these metrics. It provides the governance structure that boards and auditors expect, and aligns cybersecurity reporting with enterprise risk management.
How BSG Helps You Demonstrate Security ROI
At BSG, we help organizations build measurable security programs that produce the evidence boards need. Our approach includes:
- Penetration testing that provides quantifiable metrics showing defensive improvement over successive engagements
- Cybersecurity consulting that aligns your security program with NIST CSF 2.0, producing board-ready maturity assessments
- DevSecOps implementation that embeds security into your development pipeline, reducing vulnerability counts and remediation time
- Strategic advisory that helps CISOs translate technical progress into business language for investor and board presentations
We help organizations and security leaders build strategic awareness of cybersecurity in a business context — because throwing money at the problem never works, and we know the difference. Get in touch to discuss how we can help you demonstrate your security ROI.
Frequently Asked Questions
What is ROSI (Return on Security Investment)?
ROSI is a metric that quantifies the financial value of cybersecurity investments relative to their cost. It measures how much risk reduction, cost avoidance, or loss prevention an organization gains from its security spending. Unlike traditional ROI, ROSI often relies on avoided losses rather than generated revenue, making frameworks like Open FAIR essential for credible calculations.
How do you calculate return on cybersecurity investment?
The most common formula is: ROSI = (Risk Reduction in Monetary Terms – Cost of Security Investment) / Cost of Security Investment. Frameworks like Open FAIR help quantify risk reduction by analyzing loss event frequency and loss magnitude. NIST IR 8286A Rev. 1 (updated December 2025) provides guidance for integrating these calculations into enterprise risk management.
What cybersecurity metrics should a CISO report to the board?
Effective board metrics include: NIST CSF maturity tier progression, mean time to detect and respond to threats, vulnerability remediation rates, penetration testing finding trends, cyber insurance premium comparisons, and compliance coverage percentages. The SEC’s 2023 disclosure rules now require public companies to report board oversight of cyber risk, making structured reporting essential.
How does penetration testing demonstrate security ROI?
Regular penetration testing creates a measurable trend line. By tracking the number and severity of findings across successive engagements, organizations can demonstrate quantifiable improvement in their defensive capabilities. Declining critical vulnerabilities and faster detection times are concrete evidence that security investments are working.
Does cyber insurance prove cybersecurity ROI?
Yes. Cyber insurance premiums reflect an underwriter’s assessment of your security posture. Organizations with documented risk management programs, regular testing, and incident response plans consistently receive lower premiums. The difference between your premium and industry averages represents a direct, dollar-denominated return on security investment.