As we spend more and more time online, the threat posed by cybercriminals is increasing and widespread
Kaylie Pferten discusses how to make money and the major trends in the cybersecurity industry.
For the IT departments of large companies, this year has been hectic. Cyberattacks have interfered with the operations of companies like Jaguar Land Rover (JLR) and Marks and Spencer. Tata, the owners of JLR, is estimated to have lost slightly less than £2 billion as a result of the incident at Jaguar. According to Fadl Mantash, chief information security officer of international pay-tech company Tribe Payments, "when a single upstream provider experiences issues, the impact doesnt stay contained; it cascades across industries." Although this was not a cyberattack, the October outage at Amazon Web Services also brought large portions of the internet to a standstill. According to Jonathan Frost, director of global advisory for EMEA at BioCatch, these instances are only the "tip of the iceberg." It follows that the demand for businesses offering cybersecurity and resilience services is understandable.
Why cybersecurity is more crucial than ever.
According to Marijus Briedis, chief technology officer at NordVPN, "an increasing amount of life is conducted online, with almost all our devices connected, in some way, including vacuum cleaners and washing machines" is the primary reason cybersecurity and cyberresilience are so crucial these days. People are becoming more conscious of the fact that "they have to take care with their online activity and need some protection from the various threats out there," even though they "still don't fully realise how much data they are sharing and how much connectivity is happening."
According to Kate Steele, a partner in Hill Dickinson's commercial dispute resolution team, "people are increasingly working away from the office" in the post-Covid business world. Businesses "are relying much more on technology, both in terms of remote working systems, but also things like AI" as a consequence. Additionally, according to Steele, "all the various crime statistics suggest that there has been a huge increase year on year in every type of cybercrime, from data theft to online scams."
According to BioCatchs Jonathan Frost, a former employee of the City of London Police, 1% of all UK businesses reported being victims of ransomware in the 2025 National Crime Survey. This type of malware takes over servers, locks out legitimate users, and demands money to regain control. Even though 1% might not seem like much, "this works out to 19,000 firms across Britain, and represents a doubling of attacks since 2024."
Additionally, according to Kate Steele of Hill Dickinsons, businesses might not be able to decide whether or not to protect themselves. This is a result of regulators and governments realizing "that companies need to take action to defend themselves, as such attacks not only harm them, but also hurt their customers, employees, and other people in their care." Take a look at the UK's Cyber Security and Resilience (Network and Information Systems) Bill, which is presently being discussed in Parliament and "which places an obligation on critical sectors to report major incidents within 24 hours, with large fines if they don."
According to Brendan Gulston, co-manager of the WS Gresham House UK Multi Cap Income Fund, it is not surprising that over the past five to ten years, conversations about such cyberthreats have evolved beyond "the background conversation that only took place in certain industries and businesses." Rather, Gulston claims that cybersecurity is "a board level discussion that is mentioned in almost every annual report of most of most businesses, irrespective of industry". According to Zain Javid, cofounder and chief technical officer of Citation Cyber, data from accounting firm PwC indicates that approximately 85% of companies anticipate an increase in their cyber budgets over the next 12 months.
A warning on the Marks & Spencer Group Plc (M&S) website after a cyberattack.
Cybersecurity's three main threats.
According to NordVPN's Briedis, there are three primary sources of the growing number of threats. The children "playing around the internet and trying to figure out how to hack your neighbor" are referred to as "script-kiddies." Cybercriminals, many of whom are connected to organized crime, pose an increasing threat to businesses, though. They usually attempt to either launch ransomware attacks or steal commercially sensitive data.
Even worse, according to Briedis, "many countries now have their own cybersecurity groups that specialize in carrying out attacks in an increasing number of cases." The statement that Europe "is facing increased hostile activity across cyber, infrastructure and information domains from regimes such as Russia" is echoed by Jonathan Frost. "Below the threshold of war but above the threshold of normal state relations" is how these alleged "hybrid conflicts" are described. This year, for instance, "the Dutch authorities identified a cybersabotage attack on the digital control system of a Dutch public service" that they ultimately linked to the Russian government. Additionally, Russia is thought to be the main suspect in the JLR attack.
According to Chris Gannatti, global head of research at WisdomTree, North Korea is also "always at or near the top of the list of hostile states, as is Iran and China". He notes that earlier this month, Chinese hackers allegedly launched cyberattacks against Anthropic, an AI start-up, in an effort to steal Claude, their AI system, and use it for nefarious ends. According to Axel Belorde, head of business development for EMEA & Asia at VettaFi, "it is unsurprising that the rise in geopolitical tensions has coincided with the rise in cyberattacks against civilian or government infrastructure" because data and sovereignty are so closely related in the digital world.
AI is bringing cybercrime into a new era.
AI computer program.
According to NordVPN's Briedis, Anthropics' experience emphasizes how AI is demonstrating "the ability to expand cybercrime exponentially," as almost every expert I spoke with agreed. Even the least tech-savvy hacker "can type something into ChatGPT and create a simple virus or malware in seconds" thanks to generative AI, which enables "vibe coding"the ability to create programs by just specifying what you want to create.
According to Briedis, "for a few thousand pounds you can get access to your own bespoke AI system that won't have any of these restrictions," but even though many of the bigger AI models are frantically attempting to incorporate safeguards to avoid this, it might be too late.
As AI develops further, its applications may go beyond just making it simpler for hackers to create malicious code. Artificial intelligence (AI) has the potential to produce "agentic" programs that can be deployed to cause havoc without constant human guidance. The tech start-up Anthropic had conducted "some really interesting testing on this front, with results showing that AI systems can demonstrate behaviours such as deception, creative problem-solving and manipulation" prior to the Chinese attack, according to Tom Kynge, portfolio manager at Sarasin & Partners.
Social engineering driven by AI has the potential to worsen the situation.
Social trickery.
AI can also assist hackers in "social engineering," a technique in which they pretend to be friends, family, coworkers, or clients in order to get people to voluntarily divulge critical security information. This is important because, according to Rupert Small, founder and CEO of Egregious, an analysis platform that attempts to shield the internet from AI deception, "cybercriminals are increasingly focusing on social engineering" as security firms have improved their defenses against viruses and security breaches. The newest models have the ability to "make us believe whatever they want us to that completely transcends what any other human can do, including your own close family," he observes.
Deepfake videos and silver-tongued chatbots are the state-of-the-art in social engineering. But more commonplace AI tools can also be dangerous. AI is already being used by hackers "to send out random emails to a large number of people at a much larger scale than they were previously able to," according to Kate Steele of Hill Dickinson. Furthermore, "while the emails from fraudsters used to be easy to spot, as the grammar or spelling wouldnt be quite right, they are now much more convincing" thanks to generative AI.
Positively speaking, there is evidence that AI can both create and protect us from security threats. According to Small, "many start-ups, many of which were established in the UK, are using AI to detect scams created by social engineering and phishing." AI "can be very good at detecting such scams at scale" according to all available data. It's possible that those who use AI for defense are "a few steps behind" those who use it for illegal activities. But "the defensive tools definitely exist, it's just a question of getting them adopted."
Cat McDonald, a partner at AlbionVC, a venture capital firm, shares this opinion. AI can "help find patterns that wouldn't be visible to the human eye, allowing you to defend yourself far better and quicker than you would be able to do otherwise," but it can also produce false positives when used to detect fraud. According to Briedis of NordVPN, his company already uses its own machine-learning algorithms to fight scam and phishing websites. Briedis predicts that cybersecurity "is going to be increasingly AI versus AI" in the future.
Threat posed by quantum technology.
Quantum technology.
Citation Cybers Javid claims that AI is not the only technology "shaping the next cyber battlefield." There is also concern about quantum computing. According to Tom Peirson-Webber, VP of engineering at Harbr, the exponentially faster computing speeds it promises will make it feasible to crack encryption systems that would typically take thousands of years to crack using current technology, making them "irrelevant". It may not be as far off as people believe. Companies "should plan on being quantum-ready sometime between 2030 and 2035," according to the UK's National Cyber Security Centre.
According to IBM, "were going to start getting useful outputs from quantum machines that are beyond the reach of classical machines" by 2029, according to WisdomTrees Gannatti. Indeed, "there has been a lot of talk about how to deal with this emerging threat, with several start-ups working on how to make encryption quantum-proof" in both the cryptocurrency and encryption communities. The US National Institute of Standards and Technology has released papers on how quantum-safe encryption standards could function, indicating that the threat is being taken seriously at the highest levels.
Nevertheless, quantum-proof encryption techniques will still need to be implemented even if they are created on schedule. Although Peirson-Webber compares the issue to the "millennium bug," where a lot of people were concerned about how the date change would affect computer systems, but the transition went rather well, this is not as comforting as it might seem. He is concerned that some businesses may be making the same mistake, since the millennium bug was only solved "because people started planning for it in 1990, rather than leaving everything to the last minute." "People stealing encrypted data today, in the hope that quantum will enable them to decrypt it in a few years time" presents another risk.
Large beneficiaries of the expanding cybersecurity market.
According to McDonald of AlbionVC, the industry is dominated by a "few, very large platforms offering a broad suite of services," so what kind of businesses will profit most from the cybersecurity boom? These platforms "are liked by the security teams of large organizations, who are completely overwhelmed by the large number of solutions out there and find that having a one-stop shop can be very helpful." They also "have strong brands, established trust."
But she also points out that the recent surge of outages and security breaches has highlighted the drawbacks of excessive consolidation "and made enterprises a little more cautious about having all of their eggs in one basket." Many of the major platforms "have reached the stage where they are not able to innovate quickly enough," she adds. "A lot of very exciting early-stage cybersecurity companies, including many coming out of academia, that are looking for solutions that can help defend against new attacks" will benefit from this.
The recent AWS outage, according to VettaFis Belorde, "is a good reminder that there is rarely such thing as 100 percent reliability" as well. "Carefully assess their remedial plans" is a necessity for businesses. When it comes to security services, this entails having a number of providers. However, when it comes to data storage, it makes sense to make sure that cloud storage isn't the only option used, with the most sensitive data kept on physically secure servers. In summary, an "entire ecosystem of companies" will profit from the "growing need for more innovative cybersecurity solutions."
How to invest in the field of cybersecurity.
An exchange-traded fund (ETF) that tracks a wide range of cybersecurity companies, like the WisdomTree Cybersecurity Ucits ETF (LSE: WCBR), is the simplest way to invest in businesses profiting from the cybersecurity industry boom. By asking professionals who have worked at a variety of organizations, including the US National Security Agency, to identify businesses that will profit from what it views as eight key themesfrom cloud security to cybersecurity educationWidsomTree has assembled a portfolio of 25 companies. Crowdstrike is the largest holding, making up 7% of the ETF; half of the fund is held by the top ten. Its total expense ratio, or TER, is 0.45 percent.
In the WisdomTrees portfolio, Akamai Technologies (Nasdaq: AKAM) is the third-largest company. Its primary business used to be connecting users to websites securely, but more recently, it has started offering cloud computing services, including cybersecurity. In contrast to many businesses in the industry, Akamai is profitable and is valued at less than 13 times its projected 2026 earnings. However, it has a track record of steady growth, averaging between 6 and 7 percent annually, with revenues increasing by 40 percent between 2019 and 2024.
Qualys (Nasdaq: QLYS) is another significant investment in WisdomTrees' portfolio. Qualys uses a cloud computing platform to offer an extensive range of cybersecurity services. It has a proven track record of expansion, with sales almost doubling between 2019 and 2024 and earnings per share rising during that time. It trades at 21 times expected 2026 earnings, which seems more than reasonable given its robust operating margins and return on capital employed of over 30%.
Fortinet (Nasdaq: FTNT) is one cybersecurity firm that Tom Kynge, portfolio manager at Sarasin & Partners, believes is one of the "winners" when it comes to firewalls, a barrier intended to prevent unauthorized individuals from gaining access to a network. It offers a platform that offers a variety of services, including secure networking and AI-driven security operations, rather than just one. Since 2019, sales have almost tripled, and earnings per share have more than doubled. This supports a price-to-earnings (p/e) ratio of 28 in 2026.
Palo Alto Networks (Nasdaq: PANW), another cybersecurity company that Kynge enjoys, is a significant holding of HANetfs Future of Defence Ucits ETF (Nato) VettaFis Axel Belorde. Network security, cloud security, and security operations are some of its divisions. A Threat Intelligence and Advisory Service is another feature. Revenue has more than doubled since 2021, and the group is anticipated to continue growing rapidly despite the stock's 2026 p/e of 47.
PCI-PAL (LSE: PCIP) is one smaller business that stands to gain from raising corporate awareness of cybercrime in fraud. PCI-PAL specializes in making sure that a company's payment systems are safe so that they can accept payments online or over the phone without worrying about fraud. PCI-PAL is "a great example of a company that, while not seeking to provide cybersecurity directly, has developed a product that is in demand because of companies worries about fraud," according to Brendan Gulston of the Gresham House UK Multi Cap Income Fund. Although PCI-PAL has only recently begun to turn a profit, its revenue has increased fivefold since 2020, making it a riskier investment.
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