On the back of the surge in mobile communications, the Internet of Things and cloud computing, the importance of digital security is coming to the fore, Alex Fung of Vontobel Wealth Management Asia writes.
By Alex Fung, CEO Vontobel Wealth Management Asia-Pacific
Meanwhile, the marked increase in data transfers means IT systems are ever more vulnerable. The global cyber attack WannaCry is the latest proof of this development.
Against this backdrop, demand for a wide range of technological solutions in the cyber security area is set to increase further. This segment has developed into a technological trend in its own right, boasting strong growth potential.
Global Cyber Attack WannaCry
The WannaCry ransomware spread rapidly around the globe mid May 2017. The malicious code took advantage of a flaw in commonly used software – in this case, the Windows operating system. As a piece of software that blocks access to computers until money is paid, ransomware WannaCry has swamped machines in over 150 countries.
To unblock access to a user's files, the hackers, named Shadow Brokers, were demanding 300 US dollars in the virtual currency Bitcoin.
Digital Attacks on the Rise
Cyber attacks are at the top of the list of global threats. On one hand, the Internet of Things (IoT) and internet services have created a hyper-connected world that will have a huge impact on every aspect of our lives. This will be a boon for productivity, but it will come with a big price tag if we can’t build effective cyber security.
Cyber security involves protecting information and systems from major cyber threats, such as cyber terrorism, cyber warfare, and cyber espionage. In their most disruptive form, cyber threats take aim at secret, political, military, or infrastructural assets of a nation and company or its people.
Cyber security is therefore a critical part of any governments’ security strategy. The U.S. federal government for example, has allotted over 13 billion dollar annually to cyber security since late 2010.
Attractive Growth Market
In 2004, the global cyber security market was worth approximately 3.5 billion dollars – and by end of this year it will be worth at least 35 times that amount, according to estimates.
Cyber security is one of the fastest-growing and largest technology sectors. According to Cybersecurity Ventures, a leading market researcher, the cyber security economy will develop as follows over the next five years:
- From 2017 to 2021, global spending on cyber security products and services to combat cyber crime will exceed a cumulative 1 trillion dollars.
- Cyber crime damages will cost the world 6 trillion dollars annually by 2021, up from 3 trillion dollars in 2015.
- There will be 1.5 million cyber security job openings by 2019, up from 1 million in 2016. By 2019, the demand for cybersecurity professionals will increase to approximately 6 million globally.
- The unemployment rate among cyber security professionals will remain at zero percent from 2017 to 2021.
Cyber Security Market – How to Participate
There are numerous possibilities for Asian investors keen to participate in the potential of this growth market. Given the rapid pace of change in the market and the intense competition, the main skill for advisory firms is to be able to identify the winners of the future in the cyber security or cloud computing market.
Before making any investment decisions, it is therefore best to speak with experts who have the necessary expertise to pick underlying instruments in these technology segments.
*Source: Cybersecurity Ventures, October 2016
Alex Fung is the Chief Executive Officer of Vontobel Wealth Management Asia, based in Hong Kong.
