Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 269

Fight cybercrime by investing in cybersecurity

Sometime between 2008 and 2009, the number of devices connected to the internet surpassed the number of humans using it. Today, there are close to 4 billion people with access to the internet, while the number of devices connected to the internet is over 8 billion. By 2020 there will be 30 billion devices connected to the internet. Welcome to The Internet of Things, or IoT.

 

The things on the internet

So, what things are we talking about? Chances are you already have a few of them in your home. Australian homes are now packed with smart speakers, WiFi cameras, thermostats, televisions and light bulbs that can be controlled from our smartphones or by voice. These devices have their own IP address and can communicate with other devices – the smart speaker can control the lights, the WiFi camera can cast to the TV screen – over the internet.

You can already buy a fridge that will send you a photo of its inventory and a doorbell that will alert your phone and stream video allowing you to talk to your visitor while on the other side of the planet. What’s coming next, though, are billions of sensors that will measure temperatures, moisture, movement, traffic, crowds, travel times, speeds, positions, chemical concentrations … almost everything.

These sensors will use little power and have batteries that last for years. They will monitor agriculture, roads, pipelines, sewerage leaks, pollution, bushfires, public transport and our offices and homes. They will be used to help run factories, optimise logistics, manage inventories, avoid traffic jams, schedule timetables and prevent machines from breaking down. To handle all the data they produce, each new 5G phone tower will have the capacity to communicate with up to 250,000 of these devices simultaneously, as well as carry our calls, messages and browsing. Combined with wired access, the internet can now move over 300 terabytes of data per second and capacity is growing at around 30% per year.

Which is just as well, because we took more photos in the past four years than were taken in the previous 175 years combined. We already produce over 2.5 quintillion bytes of data every day and 90% of all the data that exists in the world today – text, photos, measurements, everything – was created in the past two years.

 

Public versus private

Much of this torrent of data is public, but there will always be a large part that we wish to keep private. Cybersecurity is a concept that barely existed at the turn of the century, whereas today it’s front and centre of the digital age. The biggest concerns aren’t that a hacker could see that you quaffed that chardonnay in your fridge or watch who rings your doorbell. Although, who wants that information out there anyway. More importantly, customer data, financial transactions, health records and even our personal browsing history are things that need to be kept safe.

 

Hacks are on the rise

 

This spectacular growth in online data in recent years has, unfortunately, also seen equally strong growth in cybercrime – and it’s not just billionaires with significant offshore holdings who should be concerned with the increase in cybercrime, everyone with any information online should be wary.

While most people are familiar with the ‘big’ hacks, such as the 2014 data breach at Yahoo which resulted in over 3 billion user records falling into the hands of criminals, there are attacks being attempted every day. From cases of disruption to our transport systems through to a case at the end of 2017 when a British couple found that their shopping loyalty reward points had been used by criminals to book a Spanish holiday, cybercriminals are attempting to disrupt and profit from our online information. Governments, private companies and households across the globe are fighting an ever-intensifying battle with cybercriminals to prevent abuse of their online information and disruption to their IT related activities. The ongoing health of the global economy – and its ever-growing interconnectivity via online networks – vitally depends on cybersecurity systems keeping one step ahead of those with malicious intent.

 

Cybersecurity: a growing investment consideration

Protecting all that data is a big business, and the global demand for cybersecurity services has grown rapidly in recent years and will continue. According to Gartner Research, global spending on cybersecurity has increased at an annual rate of around 8% since 2011, and is forecast to reach $US 96 billion by the end of 2018.

In a world where smart, connected devices already far outnumber humans, we need to ensure our data is under lock and key. So update your software, be careful what you click, make sure you have strong passwords with two-step authentication and back-up all your important stuff. Don’t get hacked.

(The Nasdaq CTA Cybersecurity Index, the index our Cybersecurity ETF aims to track, provides exposure to leading global cybersecurity companies from the US, Britain, Israel, Japan and South Korea including names like Cisco, Symantec, CyberArk and Itron.

 

Tamas Calderwood is National Manager, Adviser Services at BetaShares, a sponsor of Cuffelinks. This article is for general information and does not consider the circumstances of any individual investor. See BetaShares' publication, The Case for HACK, for more information.

For more articles and papers from BetaShares, please click here.

  •   29 August 2018
  •      
  •   

 

Leave a Comment:

RELATED ARTICLES

The challenges of building a lazy portfolio

Global ETFs: insights into a multi-trillion-dollar industry

Australian ETFs: end of year reviews 2018

banner

Most viewed in recent weeks

Building a lazy ETF portfolio in 2026

What are the best ways to build a simple portfolio from scratch? I’ve addressed this issue before but think it’s worth revisiting given markets and the world have since changed, throwing up new challenges and things to consider.

Meg on SMSFs: First glimpse of revised Division 296 tax

Treasury has released draft legislation for a new version of the controversial $3 million super tax. It's a significant improvement on the original proposal but there are some stings in the tail.

Ray Dalio on 2025’s real story, Trump, and what’s next

The renowned investor says 2025’s real story wasn’t AI or US stocks but the shift away from American assets and a collapse in the value of money. And he outlines how to best position portfolios for what’s ahead.

10 fearless forecasts for 2026

The predictions include dividends will outstrip growth as a source of Australian equity returns, US market performance will be underwhelming, while US government bonds will beat gold.

13 million spare bedrooms: Rethinking Australia’s housing shortfall

We don’t have a housing shortage; we have housing misallocation. This explores why so many bedrooms go unused, what’s been tried before, and five things to unlock housing capacity – no new building required.

10 things I learned about dementia and care homes from close range

My mother developed dementia before eventually dying in June last year. She was in three aged care homes before finding the right one. Here is what I learned along the way.

Latest Updates

Taxation

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

Property

It's okay if house prices drop

The assumption that falling house prices are electorally fatal has shaped policy for decades. Evidence from upzoning suggests affordability can improve without reducing overall housing wealth.

Investment strategies

Investment bonds for intergenerational wealth transfer

Investment bonds can be a versatile and a tax-effective option for building wealth for longer-term investment goals. They can also be used as an estate planning tool, enabling the smooth transfer of wealth to younger generations.

Investment strategies

Why switching to income may make sense in 2026

Investors are jumpy as valuations continue to rise and income investing may provide a respite. In a challenging market for income investing AML offers their top picks.

Interviews

Retiring Schroders boss on lessons he’s learned, industry changes, and the market outlook

CEO Simon Doyle is retiring after 38 years in the finance industry. In an interview with James Gruber, he shares the three main lessons he’s learned, and where he sees opportunities and risks in markets today.

Investment strategies

How US midterm elections affect the markets

Investors may overlook the US midterms amid global events, but they could still impact markets. History shows markets react during midterm years, with increased volatility and lower returns. Will this year be any different?

Investing

Does increasing geopolitical risk lead to higher equity market returns?

Increasing geopolitical tensions has investors on edge but one study shows evidence of a war premium for equity markets.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.