Technology and Internet have become part of our life since ‘90s. We have exploited their numerous and incredible advantages so far, however, in recent days, technology and internet have been threating by a great increase in numbers of cyberattacks not only to private people such as malware or simple Trojan, but also to the main and biggest companies in the world. Let’s take for example the last one. Yahoo disclosed last Tuesday to have been attacked by a cybercrime organization (they still don’t know who is liable of this attack, but the US government suspects China behind it).
The San Francisco located company reported that that 500 million user accounts have been stolen from it, making it the largest data breach from a single site in history (see image). The information stolen from these accounts may have included names, email addresses, telephone numbers and dates of birth, but fortunately not payment card data, or bank account information. Leaving aside the problems of the non-immediate disclosure that sent Yahoo’s share price plunging, Yahoo’s cyberattack is not an isolated case. In the last few years, lots of companies experienced a breach in their systems and a data-stealing. For example, JPMorgan was struck by a breach in 2014 where cybercrimes stole information of 76 million households. The financial sector is one principal target for cyber criminals, whether they are seeking to make a profit from customer data or confidential information about deal-making, or are “hacktivists” or nation states wishing to make a political point. But the banks are also some of the best protected companies against cybercrime, with large numbers of security staff and customized software that many other companies cannot afford.
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As a result, many companies are trying to embrace the growth opportunities by selling software or other safety devices that can protect the users from the data stealing. But why is cybersecurity concerning more and more people? To answer this question, we should take a look at 4 big worldwide trends:
The growing importance of cybersecurity is confirmed also if we see the chart of Cyber Security Index (HRX). The HRX is an index created by the International Securities Exchange and at January 31, 2016 it included 71 companies, such as Cisco System, Palo Alto Networks and Symantec. The index contains 2 types of stocks: Infrastructure providers (software/hardware) and service providers. However, the main important aspect to highlight is the return performed by it. From December 2010 to August 2016 the index had an overall return of +154.59% that explains the increasing importance of cybersecurity worldwide and the great potential of the companies in this market.
- Value continues to migrate online and digital data have become more pervasive. More money is “online” and as a result online transactions create bigger incentives for cybercriminals. Moreover, corporations looking to mine data—for instance, transaction and customer information—create valuable intellectual property that is in itself an attractive target.
- Corporations are expected to be more ‘open’ than ever before: Business Unit have been demanding access to corporate networks through the same mobile devices that they use in their personal lives.
- Supply chains are increasingly interconnected. To strengthen ties to customers and optimize supply chains, companies are encouraging vendors and customers to join their networks. Although it has clear benefits, it also means that a company’s defense against attacks rests in part on the security policies of partners and customers.
- Malevolent actors are becoming more sophisticated. Professional cybercrime organizations have become more technologically advanced. As they receive payment for every pc they infect, the past five years have seen more complex, targeted attacks.
The growing importance of cybersecurity is confirmed also if we see the chart of Cyber Security Index (HRX). The HRX is an index created by the International Securities Exchange and at January 31, 2016 it included 71 companies, such as Cisco System, Palo Alto Networks and Symantec. The index contains 2 types of stocks: Infrastructure providers (software/hardware) and service providers. However, the main important aspect to highlight is the return performed by it. From December 2010 to August 2016 the index had an overall return of +154.59% that explains the increasing importance of cybersecurity worldwide and the great potential of the companies in this market.
Source: Bloomberg, International Securities Exchange Methodology Guide on HXR Index
Emanuele Fabbri