The consequences and severity of cyber-attacks are increasing with an increase of more than 60% in the average cost of cybercrime for companies over the last five years, says Guy de Blonay, manager of the Jupiter Financial Innovation fund.
Banking software, data protection, and payment protection are three important areas of opportunity. The international financial sector is experiencing a growing and irreversible trend toward financial innovation. Banks are already investing heavily in new technologies to keep up with the fast-paced digital revolution that is taking place around the world. Digitization has already proven extremely beneficial for banks and their customers, providing access to many areas such as big data, artificial intelligence, and blockchain via contactless payment and mobile finance. However, all this comes with a significant risk: the rapid development of cybercrime.
It is, therefore, necessary to recognize cybersecurity as an essential component of financial innovation as an investment theme; without it, the development of cryptocurrency, big data and e-payment systems is impossible. As the world is more and more connected, the financial services sector must remain alert to developments in cybercrime, as there is a risk of paying the consequences. Financial services often targeted Not surprisingly, the financial services sector is one of the main targets of cybercrime. A large amount of customer data and financial assets held by banks, in particular, make them the most obvious targets for cybercriminals. In fact, according to a Websense study, financial services firms would be affected by security breaches 300% more often than companies in other sectors.
Cyber attacks are also much more expensive for financial services companies. The average cost of cybercrime for businesses in the sector increased from $ 12.97 million per business in 2014 to $ 18.28 million in 2017, much more than the average cost of $ 11.7 million per business across sectors (source: Cost of Cybercrime Study, Accenture, and Ponemon Institute 2018).
The financial burden of these crimes should increase as these incidents become more frequent and cybercriminals become more sophisticated in their attacks by seeking to exploit vulnerabilities created by greater connectivity. However, the consequences of cyber attacks are not limited to financial costs. In recent years, several high-profile cases have damaged the reputation of many companies around the world. The actual number of incidents could be significantly underestimated as companies are reluctant to make such attacks public, but as stricter regulations require greater transparency as a result of hacking and data breaches, it will be more difficult for companies to hide these incidents. Cybersecurity: a booming industry Corporations have been investing heavily in IT security for some time now, but the frequency and increasing importance of cyber attacks will likely lead to increased cybersecurity spending.
According to a study by Business Insider Intelligence, up to $ 665 billion will be spent on cybersecurity projects to protect PCs, portable devices and connected objects (IoTs) by 20203. The cybersecurity market could see a five-fold increase in global technology spending by 20204, and the costs of these crimes are expected to continue to rise as the average cost has already increased by around 62.5% since 2013. The growing size of venture capital ventures in the field of cybersecurity also highlights the growth of the sector. More than $ 5.
3 billion was invested in global networks, systems, and data protection companies last year, 20% more than in 2017 and nearly double spending in 2016. Turning threats into investment opportunities As the cybercrime threat increases, the number of FinTechs entering the cybersecurity sector also increases. The multiplication of risks has also created a new sub-sector of “cyber insurance” within the insurance sector. As a bottom-up investor and stock-picker, it is essential for us to know how to navigate this oversaturated market in order to identify the most interesting opportunities.