Massive Cost of Cybercrime Prompts Significant Cybersecurity Investment

Cybercrime is costing our society trillions of dollars, but it does have an upside: the cybersecurity market is witnessing significant investment, as policy-makers, entrepreneurs, CEOs and tech innovators strive to curb the adverse impact of cybercrime.
According to a recent report published by Cybersecurity Ventures, cybercrime is a rapidly accelerating global problem. The numbers speak for themselves. In 2015, cybercrime cost the global market a whopping $3 trillion. Five years from now, in 2021, it is estimated to cost the world an excess of $6 trillion.

Costs of cybercrime grow exponentially

These figures are based on historical cybercrime figures that consider year-over-year growth, an increase in hostile state-sponsored attacks, organized crime gang hacking, and more. The cost prediction includes the damage and destruction of data, stolen money, intellectual property theft, the violation of personal and financial data, fraud, embezzlement, reputational harm and more.
The most alarming part is that these figures might be understated. Steve Morgan, founder and CEO of Cybersecurity Ventures, tells CSO that these are actually conservative estimates, as they do not include unreported cybercrimes, legal and public relations fees, declines in stock valuations, interruptions to e-commerce and more in the wake of cyber attacks.

Evolving cyber attacks, evolving cybersecurity

In recent years, cyber threats have evolved from targeting cell phones, computers and online networks and have began to have a real impact on human security. For example, as the popularity of self-driving cars increases, our vulnerability to automotive hacking increases as well. As we reap the benefits of an electronically interconnected world, the potential consequences of cybercrime become more pronounced.
Nonetheless, data remains the primary target for hackers. Microsoft (NASDAQ:MSFT) predicts that, within the decade, we’ll see an explosion of online data to 50 times greater volumes than we see today today. Meanwhile, hackers see great economic value in accessing this data. Luckily, today’s cybersecurity industry is ready to rise to the challenge. Rather than viewing cybercrime as an insurmountable task, they are tackling the problem head on through innovation and savvy investment.

Companies to watch

There are a number of huge tech companies that operate within the cybersecurity space, but some of the most interesting players operate in the small- to mid-cap range, presenting specializing solutions to the industry’s most pressing problems. For instance, Rapid7 Inc. (NASDAQ:RPD), a provider of security data and analytics solutions that allow organizations to implement proactive cybersecurity measures, has seen a 38.38 percent boost in share price over the past three months.
VASCO Data Security International (NASDAQ:VDSI) is another interesting player. The IT security company designs, develops and markets security solutions that secure and manage access to digital assets and facilitates online transactions online, on mobile, and in person. Although not quite as extreme as Rapid7, the company has seen solid 18.55 percent growth over the past three months.
As these companies illustrate, there is a strong cohort of cybersecurity specialists ready to conquer cyber attacks head on. What the market needs now is strong investment to propel it into the future, where it can effectively combat the global problem of cybercrime.
 
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Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.