The landscape of cybersecurity investments

The landscape of cybersecurity investments
Photo: Dan Grytsku, BS

It wasn’t that long ago that cybersecurity was little more than a buzzword. It’s not that it’s unimportant, it definitely is, it’s just that it sounded like something that the average people should not be concerned with.

Of course, with recent cybersecurity issues such as the 2017 WannaCry ransomware attack and the recent domestic ban of Chinese telecommunication giant Huawei from taking part in Australia’s 5G network development project amidst security concerns due to their Chinese ties, the issue has taken a certain spotlight.

The fact that this issue has now entered mainstream conversation is especially relevant with regards to investment. As we all know, one of the main driving force behind investment is to identify future trends and to make profit out of it and just like the trend in A.I. and electric cars, cybersecurity issues have been garnering more and more time in the headlines. Common investment and trading courses would yield the same advice, to beat the market, always get ahead of them.

The importance of cybersecurity on governments

In investment, there is no such thing as a sure bet, but when you look at the bigger picture, cybersecurity comes pretty close. Unlike with A.I. and electric cars, where the government acts more like a watchdog that closely monitors the development with little active participation, save for a couple incentives here and there, cybersecurity is an issue they take seriously.

Obviously, when sensitive government data is available online, they’d do whatever they can to protect them, hence the emphasis on cybersecurity.

The WannaCry ransomware attack for example hit England’s National Health Service, which briefly disrupted healthcare services across the country. Healthcare is a sensitive issue and even the briefest interruptions could cause irreparable damage to critical patients, which is why the UK government has decided to invest £1.9 billion in cybersecurity to 2021 to fend off similar attacks in the future. That is quite a hefty investment.

Australia too isn’t taking this development lightly. The Australian Cyber Security Growth Network (ACSGN), the government initiative that aims to push cybersecurity development across the country aims to triple the size of the industry, which is now a $2 billion industry into a $6 billion industry. This move is aimed at positioning the country as one of the global leaders in the industry while also securing jobs and investments for cybersecurity researchers in Australia.

The importance of cybersecurity on the public

Shifting our concerns to the public, things are no less dire. As the dividing line between our digital and physical existence gets blurrier and blurrier, more and more facets of our lives are plastered all over the internet. You can for example, paint a general picture of someone’s life simply by composing snippets from their Facebook, Instagram and Twitter accounts or through your history of purchase from Amazon.

Using Amazon as a baseline, do you know how many of your purchases in the last few years were made digitally? One other prevalent trend in the past decade is the the steady progress our society has made towards a cashless society. With that progress, it is inevitable that more and more of our financial information is spread online as the number of platforms we use increase. Now you buy videogames online through Steam, enjoy your music through Spotify, watch films through Netflix and buy food through Uber Eats.

Investing on cybersecurity

The good thing about cybersecurity is that as long as internet usage keeps rising, cybersecurity concerns are only going to get bigger. So how do you take advantage of this? Now, the domestic cybersecurity industry is still relatively small so options within Australia is still relatively limited but globally, there are a number of available options. The American software company Symantec for example specializes in cybersecurity and since acquiring Norton, the company has gained a prominent foothold within the industry.

Another viable option is to invest in an ETF that specifically deals in cybersecurity. ETF is a combination of mutual funds and stock in that you are basically buying share for a company that owns multiple assets. Essentially, you indirectly own a portion of those assets. One of cybersecurity ETFs available is BetaShares Global Cybersecurity ETF, which trades on the Australian Stock Exchange under the code HACK.

Either way, whether by investing in individual companies or by taking advantage of inherent diversification from ETFs, investing and taking advantage of the rising trend in cybersecurity has never been easier.