Site Logo
Site Logo

Cybersecurity: The megatrend that EVERY business must consider

21 May, 2021

Sponsored by

WisdomTree

We may think of ‘hacking’ as occurring in a dark room, but hackers tend to have a much higher chance of successfully breaching a network by posing as a legitimate visitor and walking in the front door. It is critical that any cybersecurity strategy not only addresses technical factors, but also educates people on risks and exploitative techniques that could be used.

By Christopher Gannatti, Head of Research at WisdomTree

Don’t forget the weakest link: humans

Do you realise that some of the most popular passwords that people use are ‘123456’ or ‘password’[1]

We may think of ‘hacking’ as occurring in a dark room, but hackers tend to have a much higher chance of successfully breaching a network by posing as a legitimate visitor and walking in the front door. It is critical that any cybersecurity strategy not only addresses technical factors, but also educates people on risks and exploitative techniques that could be used.

Encryption: A constant battle for security

Encryption is another term that gets lots of attention. Of late, users of different messaging applications such as WhatsApp, Signal, iMessage and Telegram have been faced with important choices when it comes to discerning which of these may be the most fit for their purposes. Frequently, these types of platforms become captured by network effects, i.e. users may not love how WhatsApp is owned by Facebook, but the fact that it currently has more than 2 billion users and many attractive features may make switching to Signal, for example, more challenging.[2]

Encryption also tends to gain attention through the lens of quantum computing, namely that current techniques, such as 2048-bit RSA could theoretically be broken by a powerful enough quantum computer in a reasonable amount of time. The company, IonQ, has announced its intention of going public through a special-purpose acquisition company. While no commercial-grade quantum computer has been built, it is expected that by 2023, 20% of global organizations could be budging for quantum computing activities [3]. Companies involved in information security are certainly already allocating time, money and research effort to this space.

Big Events and Scary Trends

President Biden’s big Infrastructure Plan has brought the word ‘Infrastructure’ out on the global stage, but one of the scariest areas of cybersecurity regards infrastructure. In February 2021, there was an incident in Florida where an ex-employee was able to access the control system at a water utility and change the chemistry of a city’s drinking water[4]. While the action was immediately corrected, the illustration of the potential for harm in this case was scary, especially considering how many small municipalities are spread across the United States with varying degrees of cyber awareness.

While, fortunately, there hasn’t been a proliferation of infrastructure attacks in 2021, it is expected that the gigantic problem of ‘Ransomware’ will carry over from 2020. In FireEye’s most recent corporate presentation, it was reported that [5]

  • The number of Ransomware engagements increased 10x in 2020 relative to 2018.

  • There was a wide range in average cost, from $250,000 all the way to $50 million.

  • 1 in 10 businesses close due to a Ransomware attack

Attacks on schools, hospitals and health care systems have tended to get the attention, but importantly people must realise that Ransomware could be a problem for any business in any industry.

Cybersecurity works in concert with other Megatrends

77% of firms either did not change their investments in artificial intelligence or even increased these investments during the Covid-19 Pandemic period [6]. As many consumers have shifted to ecommerce, many businesses are seeking to collect and monetise this data, and AI represents the toolkit with which to do this. The ease of access to cloud computing storage and computational resources makes this an even easier proposition.

When firms are considering AI implementation, it is notable that cybersecurity tends to be viewed as 1) the top risk or concern and 2) the key thing garnering the investment in risk mitigation. It would be difficult to imagine a firm investing in or implementing artificial intelligence solutions without considering cybersecurity risks.

Conclusion: Not a choice but a necessity

In 2021, while we may not know exactly what services or providers of cybersecurity may be best positioned, we do know that every business needs its own plans for ransomware and other threats. As digitisation increases, so too must cyber defence.

To learn more about investing in Cybersecurity, please visit: Cybersecurity Strategy page| WisdomTree Europe

This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.

[1] Source: Shebu, Sherin. “2020’s Most Common Passwords are Laughably Insecure.” UK PCMag.com

[2] Source: Nguyen, Nicole. “WhatsApp, Signal, Telegram & iMessage: Choosing a Private Encrypted Chat App.” Wall Street Journal. 15 January 2021.

[3] Source: Castellanos, Sara. “Quantum-Computing Startup IonQ Plans Public Debut in $2 Billion SPAC Merger.” Wall Street Journal. 8 March 2021.

[4] Source: Camp-Flores, Arian. “Hacker Changed Chemical Level in Florida City’s Water System.” Wall Street Journal. 8 February 2021.

[5] Source: FireEye 2021 Corporate Presentation.

[6] Source: Daniel Zhang, Saurabh Mishra, Erik Brynjolfsson, John Etchemendy, Deep Ganguli, Barbara Grosz, Terah Lyons, James Manyika, Juan Carlos Niebles, Michael Sellitto, Yoav Shoham, Jack Clark, and Raymond Perrault, “The AI Index 2021 Annual Report,” AI Index Steering Committee, Human-Centered AI Institute, Stanford University, Stanford, CA, March 2021.