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Make cyber crime pay: Cash in on the war against hackers and rogue states

Threat: Expected industry growth suggests cybersecurity could provide long-term protection for your wallet

Companies such as Blancco, CrowdStrike, Darktrace, Arqit, KnowBe4, Palo Alto, Splunk and Qinetiq may not be known.

But these are just some of the US and UK players listed in cybersecurity, a $120bn (£99bn) global market whose technologies are of ever-increasing importance to businesses, governments – and households, as people live more of their lives online. .

The industry’s expected growth suggests that cybersecurity could provide long-term protection for your wallet.

Threat: Expected industry growth suggests cybersecurity could provide long-term protection for your wallet

Threat: Expected industry growth suggests cybersecurity could provide long-term protection for your wallet

Such is the growing threat from ransomware criminal groups, hackers and rogue states to private and public sector services, computer systems and personal devices like phones that the market could be worth $434bn (£358bn). pounds) by 2030.

“Criminal organizations and nations are trying to steal secrets from individuals, corporations and governments,” says Mike Seidenberg of the Allianz Technology Trust, whose holdings include CrowdStrike and Palo Alto. “What did Russia do before starting the war in Ukraine?

“Launch a cyber attack on Ukraine’s communication systems. Cybersecurity is the best territory in technology right now.

The offensive at the start of the war in Ukraine and the damage to the Nord Stream gas pipelines portend further Russian action.

As Steve Wadey, CEO of Qinetiq, said, “World events continue to reinforce the vital importance of a technologically advanced defense industry to society.

Cybersecurity involves the use of AI and other technologies to provide protection against cyberattacks and what the industry calls “unauthorized exploitation of systems, networks and technologies”.

You can doubt any kind of tech though, given how well Big Tech has performed this year. Stocks fell as rising interest rates undermined the attractiveness of the long-term yields offered by these groups.

Yet while companies across all industries are saving money, they are less likely to cut back on cybersecurity, given the scale of the problem. Many could increase spending, as cybercrime costs businesses up to $1 trillion a year.

A victim of the iSpoof phone and website cybercrime gang, shut down by Scotland Yard this week, has lost £3million. Charlotte Meyrick, fund manager of Aviva Investors UK Listed Small and Midcap, comments: “The proliferation of threats and repercussions for companies in the event of non-compliance is more onerous today than in the past.

“As a result, a company’s cyber strategy is increasingly a strategic business issue.”

The consulting firm Accenture highlights the risks of security breaches via supply chains. Those incursions, or so CrowdStrike says, grew 431% last year.

Supply chains “provide a base of attack” because a company, its customers, and its suppliers can have systems linked for greater efficiency. Soaring demand for services could be why shares in the sector have fallen less this year than those of other technology groups.

The ISE Cyber-security index is down 28% since January, less than the drop in the tech-heavy Nasdaq 100 index.

The Aviva fund owns Blancco, which wipes data from discarded computers, and NCC, whose slogan is: “Just because you can’t see cyber threats and risks doesn’t mean they aren’t there.” He is also a shareholder in the defense specialist Qinetiq, a company separated in 2001 from the Ministry of Defence.

Today, its main clients are the US, Australian and UK governments. Analyst consensus rates shares of Blancco, NCC and Qinetiq as long.

America may dominate the industry, but Britain is a major force, carrying on the legacy of Bletchley Park and its wartime codebreakers. Currently, Darktrace is perhaps the most controversial option in the UK, following US private equity fund Thoma Bravo’s decision in September to drop a bid.

The mystery also surrounds the intentions of Mike Lynch, founder of Darktrace and holder, with his wife, of a 12% stake. Lynch is at risk of being extradited to the United States following the takeover of his Autonomy company by Hewlett Packard.

Despite this, brokers Jefferies and Numis are rating it as a “buy”, reflecting excitement over CEO Poppy Gustafsson’s ambitions to make Darktrace a world-class example of British innovation.

There is considerable demand from organizations for its Prevent system. Exactly how Prevent simulates the malicious thought processes of a ransomware hacker the vast majority of us will never know. Like other ever-evolving technologies deployed by all cybersecurity companies, this system is complex and shrouded in secrecy.

When investing, it can be tempting to avoid companies you don’t understand. I resist this urge. I want to take advantage of the increased spending on their products and be part of the fight back.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.

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