Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 210

Cybercrime response may slow internet

In mid-April, the 'Shadow Hackers' online group made public some malicious software that had been stolen from the US government’s National Security Agency. A month later, 'ransomware' dubbed WannaCry that incorporated the bugs pilfered from US intelligence penetrated perhaps 300,000 computers running outdated Microsoft software in an estimated 150 countries.

While that might well be the most chilling cyberattack ever, it’s perhaps not the most significant because hackers have tried to influence elections, most notably the US election last year. While it will never be established how much the hacked emails from Hillary Clinton’s campaign helped Donald Trump, it’s apparent that cybercrime is all too common. It is already a US$1 trillion-industry worldwide, according to some estimates.

Nothing is safe on the internet

Whatever the true figure, identification theft, fraudulent online transfers, payment-card frauds, network assaults, denial-of-service attacks by malicious networks of computers (botnets), ransomware, cyberbullying, trolling and online child pornography are too common. They show that nothing is safe on the internet – apart from criminals, it seems.

If people, businesses, governments and other bodies including hospitals can’t trust the internet to protect data, share files, host websites, seamlessly send and receive messages and make payments, an internet slowed by protections and precautions could assume a lower profile in everyday life – or fall well short of its potential anyway. To maintain the public’s trust in the internet, policymakers are making cybersecurity a top priority while an industry has sprung up to protect cyberspace. It will be a never-ending battle.

To be sure, billions of interactions happen every day on the internet without hassle. A cyberattack is yet to trigger a catastrophe. Firewalls, virus antidotes and sophisticated behavioural defences help protect systems. The payments companies have never suffered a significant breach. Neither have the big digital-platforms. That may not last. The core problem is that the foundations of the internet are insecure. After all, they were designed to allow a few trusted parties to communicate, not billions worldwide.

Fragile and flawed

Amateur hackers were around in the early days of computers. Nowadays, cybercriminals operate in sophisticated packs. Thanks to technological advancements that allow for mass criminal activity while protecting anonymity, cybercrime is lucrative, hard to detect and even harder to prosecute.

Government, businesses and households are taking cybersecurity more seriously with each attack. The major responsibility for keeping the internet safe, however, lies with the operating system developers such as Apple, Google and Microsoft.

Microsoft software products include Windows XP, the model that WannaCry exploited. As is typical, Microsoft puts a finite life on its software versions because software is costly to update and patch.

Despite the negligence of enterprises that still use Windows XP while refusing to pay for support after its ‘end of life’, in the aftermath of the WannaCry attack, Microsoft stood accused of holding back on issuing a free repair for Windows XP that could have protected users.

Critics suggest that Microsoft would have provided support if not for its profit motive to sell software patches, and that it has an incentive to avoid providing security updates on old software, to force people to buy the latest versions. A bugbear for many people is that companies such as Microsoft bear little or no responsibility under US law if their software is vulnerable to attack.

Invisible but lethal

While governments are giving greater priority to cybersecurity, the most likely catastrophic assault on the internet is by a state-sponsored cyberwarfare attack.

Rogue governments are adept at cyberattacks, and cyberwarfare is likely to be a never-ending arms race. Democratic governments need to develop cyberwarfare technology to gather intelligence to protect their populations. The more weapons they create the more insecure adversaries feel, which prompts them to step up efforts. Another quandary is that intelligence agencies must decide whether or not to warn software manufacturers about flaws in their code. If they inform software makers (and they often do), intelligence agencies risk making worthless their cyberweaponary edge. Another concern is that cyberweapon technology is easy to steal.

Such are the unending challenges of guarding the internet against the next WannaCry.

 

Michael Collins is an Investment Specialist at Magellan Asset Management. Magellan is a sponsor of Cuffelinks.

 

  •   12 July 2017
  • 2
  •      
  •   

RELATED ARTICLES

How I lost my files to ransomware

Ransomware threatens home, office and national security

The shift to the cloud

banner

Most viewed in recent weeks

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.

Making sense of record high markets as the world catches fire

The post-World War Two economic system is unravelling, leading to huge shifts in currency, bond and commodity markets, yet stocks seem oblivious to the chaos. This looks to history as a guide for what’s next.

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

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.

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

Latest Updates

Property

The 5% deposit scheme is bad for homeowners and Australia

An ‘affordability’ scheme making the county more vulnerable to economic shocks and contributing to the deteriorating financial situation of everyday Australians.

Investment strategies

Is defensive the new offensive?

Relatively boring, unglamorous, defensive stocks like Kroger and Allstate have quietly outperformed gilded tech giants, offering steady growth, visibility, and resilient returns in a market captivated by AI and flashier industries.

Shares

How the RBA scores on its inflation goal

The Reserve Bank continues to face criticism from all sides. A reminder of the RBA's mandate and a review of their track record in maintaining price stability since the early 1990s.

Investment strategies

Levered credit: A late cycle ingredient for drawdown pain

As credit spreads normalised through 2025, yield‑hungry investors have turned to leverage for high returns, uncomfortably echoing pre‑GFC behaviours. Investors need to be careful to understand the true risk‑return trade‑off.

Planning

The more things change… longevity just goes on increasing

Australia needs a major shift in longevity awareness, attitudes and behaviour if, as a community, we are to reap the benefits of increasing longevity. Adopting a national strategy is well overdue.

Property

The improving outlook of Australian commercial real estate

The sector is positioned to benefit from defensive and resilient income streams supported by embedded rental increase opportunities. 

Property

Seize hidden opportunities among 50+ home buyer schemes in Australia

There is a laundry list of government schemes to help Australian's struggling with housing affordability. Savvy buyers should take advantage to break into the property market.

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.