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

The growing debt burden of retiring Australians

More Australians are retiring with larger mortgages and less super. This paper explores how unlocking housing wealth can help ease the nation’s growing retirement cashflow crunch.

Four best-ever charts for every adviser and investor

In any year since 1875, if you'd invested in the ASX, turned away and come back eight years later, your average return would be 120% with no negative periods. It's just one of the must-have stats that all investors should know.

LICs vs ETFs – which perform best?

With investor sentiment shifting and ETFs surging ahead, we pit Australia’s biggest LICs against their ETF rivals to see which delivers better returns over the short and long term. The results are revealing.

Family trusts: Are they still worth it?

Family trusts remain a core structure for wealth management, but rising ATO scrutiny and complex compliance raise questions about their ongoing value. Are the benefits still worth the administrative burden?

13 ways to save money on your tax - legally

Thoughtful tax planning is a cornerstone of successful investing. This highlights 13 legal ways that you can reduce tax, preserve capital, and enhance long-term wealth across super, property, and shares.

Warren Buffett's final lesson

I’ve long seen Buffett as a flawed genius: a great investor though a man with shortcomings. With his final letter to Berkshire shareholders, I reflect on how my views of Buffett have changed and the legacy he leaves.

Latest Updates

Retirement

Why it’s time to ditch the retirement journey

Retirement isn’t a clean financial arc. Income shocks, health costs and family pressures hit at random, exposing the limits of age-based planning and the myth of a predictable “retirement journey".

Financial planning

How much does it really cost to raise a child?

With fertility rates at a record low, many say young people aren’t having kids because they’re too expensive. Turns out, it’s not that simple and there are likely other factors at play.

Exchange traded products

Passive ETF investors may be in for a rude shock

Passive ETFs have become wildly popular just as markets, especially the US, reach extreme valuations. For long-term investors, these ETFs make sense, though if you're investing in them to chase performance, look out below.

Shares

Bank reporting season scorecard November 2025

The Big Four banks shrugged off doomsayers with their recent results, posting low loan losses, solid margins, and rising dividends. It underscores their resilience, but lofty valuations mean it’s time to be selective. 

Investment strategies

The real winners from the AI rush

AI is booming, but like the 19th-century gold rush, the real profits may go to those supplying the tools and energy, not the companies at the centre of the rush.

Economy

Why economic forecasts are rarely right (but we still need them)

Economic experts, including the RBA, get plenty of forecasts wrong, but that doesn't make such forecasts worthless. The key isn't to predict perfectly – it's to understand the range of possibilities and plan accordingly.

Strategy

13 reflections on wealth and philanthropy

Wealth keeps growing, yet few ask “how much is enough?” or what their kids truly need. After 23 years in philanthropy, I’ve seen how unexamined wealth can limit impact, and why Australia needs a stronger giving culture.

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.