If you are an investor, now is a great time to be doubling down on cybersecurity. Which is why many organizations are now viewing cybersecurity as a critical part of their investment protection planning.
Over the past number of years, we’ve laid out the litany of cybersecurity dangers that face everyone. Mobile threats, phishing scams, malware, crypto-jacking, third-party risk management, cloud computing, the list goes on and on. Whether you are a giant corporation, a small business or just your average Joe navigating life, cybersecurity threats are real. They also affect everyone.
Therefore, it stands to reason that investing in cybersecurity offers an opportunity. If you are in investment protection planning, this sound investment presents the potential for a large upside without posing too much risk. Obviously, that is a gross simplification but cybersecurity in 2019 is a sound investment protection plan precisely because, eventually, everyone will need it.
Investment Protection Planning In Cybersecurity
This isn’t just a cybersecurity company espousing the opportunities in its own field. Big money firms like Morgan Stanley and the largest Venture Capitalist funds are pouring money into cybersecurity companies. Today, cybersecurity is already a massive industry, estimated at $150 billion currently. That number is expected to leap to $230 billion within four years. Both the cybersecurity giants and other companies of size are spending fortunes on cybersecurity.
The cybersecurity giants are spending millions, working to protect the sensitive information of corporations everywhere. Other large corporations are also expanding large sums of money, trying to avoid damaging security breaches that have befallen other companies.
In fact, 2018 set a record for average capital invested in cybersecurity at $15.8 million. In 2017, $4.4 billion poured into the cybersecurity market. In 2018, it jumped to 5.3 billion, a whopping 81% jump from 2016, numbers reported by Strategic Cyber Ventures.
Why Cybersecurity is a Sound Investment Protection Service
The crux of why cybersecurity is a solid investment is simply how vital it is to businesses. In 2019, the threat of cybersecurity breaches can’t be understated. All one has to do is look back on 2018, the year of the hack. Facebook’s Cambridge Analytica scandal put the brightest possible spotlight on privacy and users’ data.
87 million Facebook users’ information was compromised and Facebook lost $119 billion in a single day, the largest single-day drop in history. The company also reported that 3 million users in Europe abandoned the social media platform. Not long after the massive breach, the European Union instituted stricter data protection laws. One of the largest and most powerful companies in the world took a massive cybersecurity blow and the whole world took note. What’s crazy is that 2018 also saw other gigantic security breaches that you may have not even heard about.
Marriott Hotels lost 500 million people’s personal information. Excatis, a security research company, got hacked to the tune of 340 million people’s private data. MyFitnessPal misplaced 150 million. Quora, the answer sharing platform, 100 million. The list goes on and on. Clearly, corporations need to do a better job of protecting people’s sensitive information.
That’s why so much money is currently funneling into cybersecurity. Companies have even begun using security and privacy as a means of selling themselves. You’ve likely seen Apple’s latest commercial highlighting how important privacy is and how they can ensure your data stays your own. AT&T recently announced it would stop selling your data to third parties.
Can you imagine the embarrassment and blowback Apple would receive if, after touting how sacred and secure your data is, they suffered a giant security breach? One would be hard pressed to guess how much Apple might be investing in their own security. Capitalism is alive and well in the United States and companies are slowly realizing that data protection and moral business practices sell as well as anything.
Some smaller businesses may think that only large corporations, storing terabytes of sensitive information, are at risk of cybersecurity breaches. Unfortunately, that is not the case. In 2017, more than 500 organizations endured a cyber attack. That’s a 10% rise from the year before. One large cybersecurity company’s annual report also found that the number of active hacking groups capable of large scale attacks has risen by as much as 60%!
A True Investment Protection Service
Ultimately, the numbers don’t lie. Cyber attacks are on the rise and businesses of all sizes must face them one way or another. In practice, an investment in cybersecurity is a financial stake in a crucial aspect of the security industry moving forward. It’s like investing in safes when people were still hiding their money under the floorboards.
Obviously, technology is the future. Eventually, everything we do will be online, more than it already is. One day cybersecurity will be as important as your home security, maybe even more important. For business, the argument could be made that that day is already here. Take a look at a few statistics regarding the cost and frequency of cyber breaches to organizations within the past couple of years.
The Frequency of Cybercrime
- “According to 2017 statistics, there are over 130 large-scale, targeted breaches in the U.S. per year, and that number is growing by 27 percent per year. (Accenture)
- “Thirty-one percent of organizations have experienced cyber attacks on operational technology infrastructure.”(CISCO)
- “In 2017, 5.4 billion attacks by the WannaCry virus were blocked.” (Symantec)
- “In 2017, the average number of breached records by country was 24,089. The nation with the most breaches annually was India with over 33k files; the US had 28.5k.”(Ponemon Institute’s 2017 Cost of Data Breach Study)
- “There are around 24,000 malicious mobile apps blocked every day.”
- “Attacks involving crypto-jacking increased by 8,500 percent in 2017.”
- Between January 1, 2005, and April 18, 2018, there have been 8,854 recorded breaches. (ID Theft Resource Center)
The hard truth is that these statistics show that cybersecurity attacks are on the rise at an alarming rate. According to the FBI, property crimes have been on the decline since 2011. And while no one has proved a connection between the drop in property crime and a sharp increase in cyber crimes, there is most likely a connection.
Believe it or not, criminals would prefer not to go to jail. Therefore, if they can find a more profitable illicit act that lowers their chance of incarceration, they will take it. Cybercrime in 2019 offers that opportunity. Police and other government agencies are far more well versed in investigating traditional types of crimes.
When it comes to digital crime, regrettably, the criminals are far more sophisticated than those trying to catch them. That’s another reason why investment protection planning is a smart move. If you can’t rely on the authorities to recover your investment, you have to ensure that someone can stop hackers before they take it.
The Cost of Cybercrime
- “The average cost of a malware attack on a company is $2.4 million.”
- “The most expensive component of a cyber attack is information loss, which represents 43 percent of costs.”
- “Ransomware damage costs exceed $5 billion in 2017, 15 times the cost in 2015.”
- “Including turnover of customers, increased customer acquisition activities, reputation losses, and diminished goodwill the cost of lost business globally was highest for U.S. companies at $4.13 million per company.” (Ponemon Institute’s 2017 Cost of Data Breach Study)
- “Damage related to cybercrime is projected to hit $6 trillion annually by 2021.” (Cybersecurity Ventures)
- “Ransomware damage costs exceed $5 billion in 2017, 15 times the cost in 2015.”
- “The average cost in time of a malware attack is 50 days.”
- “The average global cost of cybercrime increased by over 27 percent in 2017.”
As if the frequency of cyber attacks increasing wasn’t problem enough, so too, is the cost of cyber attacks. Whether it’s malware, ransomware or some other type of attacks, corporations are forced to shoulder heavier financial burdens when confronting a cyber attack. When a company experiences a security breach, they face costs on multiple fronts.
First, they take a hit based on whatever information was stolen. That can range from minimal losses of sensitive information to huge caches. Another cost comes to fix the issues. Whether they outsource technical help or use their own people, picking up the pieces after a cyber attack isn’t inexpensive. Then there is also the inevitable financial hit that comes with the PR disaster of a security breach. A security breach affects the reputation of your organization with consumers.
Add it up and in 2017, the average cost for a cyber attack was $4.13 million. Ouch! Doesn’t a service that avoids all the pain and headaches we just outlined sound like a sound investment? We at RSI security certainly think so.
The Public Sector Cybersecurity Market
Another reason why cybersecurity is a smart investment protection plan? The military. That’s right. If you think that the private sector has football fields worth of sensitive data, the military houses airfields. The military not only holds more sensitive data than the private sector but they secure the type of data that could threaten national security. Obviously, that ultra classified material requires the highest level of digital security available.
According to Morgan Stanley, “World military spending grew at a compound annual rate of 4.2% from 1980 to 2017. In the U.S., military spending growth dipped during the past decade, but since 2016, it has turned upward.” We should also take a look at the current global environment. China and the United States are in an arms race, not necessarily for military might but for technological superiority.
At the beginning of May 2019, the United States accused China of stealing vital technological information. Here are a couple of headlines from that story, pertaining to the importance of cybersecurity:
- “China is stealing technology from foreign militaries to advance and modernize its military, a new Pentagon report claimed.”
- The report said that China uses “cyber theft” to try and create a “world-class” military that is continually receiving increased investment.
Obviously, technology is going to play a critical role in the future of, not only the United States but of the world. Consequently, investment in technology securities is almost guaranteed to rise. For many, many decades it was those with the most weaponry who had the most power. Very quickly, technology and technology securities will be just as vital a component as the weaponry itself.
Cybersecurity’s Future Role
Whether you are a B2B or a B2C or the military, cybersecurity is an integral part of your business. As the world becomes more and more technologically advanced, cybersecurity services will only become even more significant. Cybersecurity will be, if it already isn’t, one of the few things you won’t be able to live without.
Already large investment firms are spending vast amounts of money into cybersecurity because they see its value going forward. As we mentioned earlier since 2016 cybersecurity investments have leaped by an astounding 81%. It’s a smart investment. Especially when you look at the torrent of cybersecurity breaches that occur on almost a daily basis.
Any cursory Googling will unveil the shocking amount of security issues facing organizations today. Even worse, the frequency and intensity of cyber attacks are only expected to increase! Quite frankly, we are facing a new reality and everyone must make adjustments to how they run their businesses and their lives.
Sadly, there is no antidote to cybersecurity issues. Even if we are able to extinguish, say ransomware, which is on the decline, hackers simply come up with a new means of making money, ie. crypto-jacking.
We have all become deeply comfortable with the uses of technology. Soon we will be trusting computers to drive us around and deliver our Amazon packages. Our love and dependence of technology aren’t going anywhere; neither are the criminals who capitalize on the weaknesses in our utilizing technology. That is why cybersecurity as an investment protection plan is so smart. Technology is only going to become more sophisticated, making money off its inevitable growth is just good investing.
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