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.


 

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

16 ASX stocks to buy and hold forever, updated

This time last year, I highlighted 16 ASX stocks that investors could own indefinitely. One year on, I look at whether there should be any changes to the list of stocks as well as which companies are worth buying now. 

2025-26 super thresholds – key changes and implications

The ABS recently released figures which are used to determine key superannuation rates and thresholds that will apply from 1 July 2025. This outlines the rates and thresholds that are changing and those that aren’t.  

Is Gen X ready for retirement?

With the arrival of the new year, the first members of ‘Generation X’ turned 60, marking the start of the MTV generation’s collective journey towards retirement. Are Gen Xers and our retirement system ready for the transition?

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

What Warren Buffett isn’t saying speaks volumes

Warren Buffett's annual shareholder letter has been fixture for avid investors for decades. In his latest letter, Buffett is reticent on many key topics, but his actions rather than words are sending clear signals to investors.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

Latest Updates

World's largest asset manager wants to revolutionise your portfolio

Larry Fink is one of the smartest people in the finance industry. In his latest shareholder letter, the Blackrock CEO outlines his quest to become the biggest player in private assets and upend investor portfolios.

Economy

Australia's economic report card heading into the polls

Our economy grew by a nominal rate of 7% per annum from 2017 to 2024, but it benefited from the largesse of fiscal and monetary policies, both of which are now fading. We need a new, credible economic growth agenda.

Preference votes matter

If the recent polls are anything to go by, we are headed for a hung parliament at the upcoming federal election. So more than ever, Australians need to give serious consideration to their preference votes.

SMSF strategies

Meg on SMSFs: Tips for the last member standing

It’s common for people as they age to seek more help in running their SMSF if their capacity declines. An alternate director may be a great solution for someone just planning for short-term help in the meantime.

Wilson Asset Management on markets and its new income fund

In this interview, Matthew Haupt from Wilson Asset Management discusses his outloook for the ASX, sectors such as REITs that he likes, and his firm's launch of a new income-oriented listed investment company.  

Planning

‘Life expectancy’ – and why I don’t like the expression

Life expectancy isn't just a number - it's a concept that changes with survival rates over time. This article breaks down how age, survival, and societal factors shape our understanding of life expectancy, especially post-Covid. 

The shine is back on gold, and gold miners

Gold mining stocks outperformed in 2024 and are expected to do well in 2025. At this point in the rally, it's worth considering what has driven gold prices higher and why miners could still have some catching up to do.

Sponsors

Alliances

© 2025 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.