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Cybersecurity: a megatrend with great growth potential.

2 min. reading
Cybersecurity / 8 December, 2020

Diego Balsa Portfolio Manager

Cybersecurity is the application of processes, controls and technologies to protect systems, networks, programs, devices, and data from malicious attacks. It is used by individuals, governments, and businesses to protect against unauthorised access to data centres and other computerised systems.

It is also known as IT security or electronic information security. The term is applied in a wide variety of fields, from business to mobile computing, and can be divided into a few common security categories: networks, applications, operations, identity, databases, infrastructures, mobile, cloud, emergency and disaster recovery.
As a result of growing security risks, investment in cybersecurity technologies and services is increasing at a dizzying rate (with annual percentage growth in excess of double digits), and with global spending already in excess of $100 billion.

The world depends more than ever on technology. Today, companies and governments store large amounts of this data on computers and transfer it over networks to other computers. A significant volume of this data may be confidential information, such as intellectual property, financial data or personal information.
A data breach can have a number of devastating consequences for any business (on average, each data breach is estimated to cost the affected business nearly $4 million). It can lose some of the business’s competitive advantage, as well as significantly damaging its reputation by losing consumer and investor confidence. Moreover, a data breach can lead to hefty fines as a result of non-compliance with data protection regulations.

The most difficult challenge in cybersecurity is the ever-changing nature of the security risks themselves. As new technologies emerge and technology is used in new or different ways, new forms of attack are also being developed. Keeping up with these changes and constant advances in attacks can be challenging for organisations, as is also the case with continuously updating the systems in place to protect against them. This can be especially difficult for smaller organisations, which nevertheless are being forced to invest more in security every day.

Another important point is the new advances in machine learning and artificial intelligence (AI) that have begun to be developed to help organise, manage and protect data.

Cybersecurity is a major issue of our time. For investors, it can represent an excellent long-term investment opportunity, as it is one of the megatrends with the greatest growth potential in an increasingly digital world.