Whether it’s ransomware, botnets, phishing scams, malicious domains, data-harvesting or cryptojacking, cybercrime is a clear and present danger today that not only threatens the everyday consumer but also carries the potential to jeopardise entire governments, educational institutions, corporations, local businesses and critical healthcare infrastructure. That’s why despite the global pandemic, cybersecurity investments jumped to more than $7.8bn globally in 2020, with investments in cybersecurity companies increasing more than ninefold since 2011. Of this, the US recorded 76 per cent of all global cybersecurity funding in 2020, at $5.9bn, according to Crunchbase.
The reasons behind this rush to bolster cybersecurity globally are self-evident. A tectonic shift toward digitisation of societies has rendered private data a precious commodity. In addition, future-proof technology such as the Internet of Things and cloud-based storage solutions have further amplified the data flow among infrastructures, creating even more vulnerabilities. Whether it’s malware or social engineering, companies and communities have lost millions in businesses due to cyberattacks.
Against that backdrop, it’s no wonder that cybersecurity is also one of the hottest commodities when it comes to the investment community – making it essential to gain a granular view of the industry.
As a process, cybersecurity provides integrity, confidentiality, availability and privacy of online activities to prevent cybercrimes and digital attacks on networks, programmes and data. This includes solutions in network security, cloud computing apps, web security, application security and other deployments. As the global economy embraces digitalisation and AI-based solutions, cybersecurity is no longer a fancy afterthought for organisations but a bare necessity.
A close look at the global revenue from the cybersecurity sector confirms that. The global cybersecurity market is projected to reach $160bn in 2022, where security services comprise the largest chunk of $87bn and an expected annual growth of 13 per cent. Globally, the US is the main driver of revenue in the industry of nearly $65bn, followed by China at $15bn and Japan at $10bn. This is also an industry that is poised to record phenomenal future growth: the global cybersecurity market is expected to reach $376bn by 2029, according to Fortune Business. Those same robust trends hold true for the region as well. In the UAE, the cybersecurity industry is expected to grow at an annual rate of 12 per cent, leading to a market volume of $700m by 2027. At the same time, revenue from the UAE market is projected to increase to $402m in 2022.
The counterintuitive driver of that growth and investment is, ironically, the increasing sophistication of cybercriminals and hackers. Such groups and anonymous direct attackers are not only using AI and machine learning technology for more destructive attacks, but also exploiting the gap in cybersecurity resources, knowledge and skills to pose a serious challenge to society.
Within the current cybersecurity landscape, it is evident that the potential of AI, vulnerability of cloud systems, expansion of 5G networks, and insider threats within organisations are likely to keep driving the demand for cybersecurity solutions for the foreseeable future. In addition, from digital health to fintech, new and emerging sectors seem to be gaining momentum as a fertile hunting ground for cybercriminals.
On the other hand, cybersecurity has revolutionised global trends in AI, machine learning and disruptive technology to create thousands of new jobs and companies as global demand keeps growing. That rapid growth and soaring demand means the cybersecurity industry must also confront the challenges of the high cost of project implementation, the complicated nature of the sector, requirements for constant monitoring, the real threat to the privacy of personal data and an acute shortage of talents.
Several affordable exchange-traded funds (ETFs) globally offer great value and diversification for investor portfolios, including First Trust NASDAQ Cybersecurity ETF (CIBR) issued by First Trust; iShares US Technology ETF (IHAK) by BlackRock, and Global X Cybersecurity ETF (BUG) by Mirae Asset Global Investments.
Protecting important information and assets is the most fundamental function of any company today. When cybersecurity delivers that protection and also offers a robust growth potential, the result is a win-win solution for all.
Chaddy Kirbaj is the vice director at Swissquote Bank Dubai Rep. Office
Read: Cybersecurity: Are we doing it the right way?