Investing in Core Cybersecurity Technology
The world has become increasingly more digital—with everything from customer data and employee services to entire businesses living on servers—and in recent years cybercrime has become a constant threat.
After large-scale breaches in government organisations around the world and huge public companies like Sony, cybersecurity is being taken more seriously. And since 2016, the U.S. has seen at least 1,000 data breaches every single year, exposing billions more records.
But in a field where new exploits are just around the corner, and with COVID-19 driving more employees and services remote than ever before, the need for better cybersecurity technology and investment has reached critical importance.
This infographic from eToro highlights developments in the cybersecurity market and how they affect companies, consumers, and investors.
The Cybersecurity Landscape
No person or organisation is immune to cybercrime, but some are targeted more frequently.
Across businesses, cybercriminals look for exploits in sectors with either the most to lose in terms of financials or data, or they target sectors with the least protection.
Unsurprisingly, the top industry targeted by cybercrime in 2020 was financial services. But cybercriminals also focused on manufacturing, energy, and retail—industries forced to quickly shift to digital channels because of the pandemic, but without the time to adapt and safeguard.
|Top Industries Targeted by Cybercrime||% Targeted (2020)|
Though targeting is inconsistent across industries, financial impact is significant across the board.
In Europe, the average annual cost inflicted by cybercrime for affected organisations in 2019 ranged from $8 million in Italy to $13 million in Germany. In the U.S., the average annual cost of cybercrime was over $27 million.
|Organisation Base Country||Average Annual Cost of Cybercrime (2019)|
But in terms of volume, the most common cybersecurity threat is faced by individuals instead of companies. In addition to being a common target for cybercriminals attempting to access company data, consumers faced four times as many attacks as enterprises in 2019.
The Future Cybersecurity Need
The growth of cybercrime activity and adjacent cybersecurity investment over the last few decades was already impressive, but a post-COVID world puts the digital market front and center.
In the U.S., the cybersecurity market was valued at $156.5 billion in 2019, with more than half of the market focused on services over software and hardware. In 2027, the market is estimated to be worth $326.4 billion, a compound annual growth rate (CAGR) of 10%, with the focus remaining the same.
The driver of software and hardware usage is consistent with more aspects of business and personal life digitising, but growth in services is aligned with the uncertainty of future cybersecurity issues.
Winning the Fight Against Cybercrime
Cybersecurity and cybercrime grow and build off each other in a never-ending cycle, driving a need for increased investment alongside them.
The Cybersecurity Technology Cycle:
- Increased cyber operations incidents: Cybersecurity operations incidents increase as a result of the overwhelming burden of complexity.
- Add technology: Vendors pitch new technology as the solution to cyber operations incidents.
- Add people and process: New technology requires more people and processes.
- Operational complexity increases: Interactions between technology, processes and people increase geometrically.
- Loss of process visibility and control: Fog of uncertainty develops, old management systems are overwhelmed.
- Poor human performance: Technology and process complexity decrease cybersecurity effectiveness.
- Repeat 1)
As new devices and software come online, old methods used by cybercriminals for infiltration or data gathering are replaced with new ones.
In 2019, the most commonly used initial access methods were phishing (31%), scan & exploit (30%) and unauthorised credential usage (29%), with compromise of mobile devices only accounting for 2%. With more work going offline and onto personal devices post-pandemic, and increasingly so post-digitisation, those numbers are likely to fluctuate.
That’s why the cybersecurity market is expected to keep growing in importance and size over the coming decade. An increasingly digital world is putting more risk online as well, and as many companies have learned the hard way, cybersecurity is a core technology worth investing in.
How Can Investors Take Part?
eToro’s CyberSecurity CopyPortfolio* gives investors direct access to the growing cybersecurity market.
Curated by experienced and proven investment teams, the thematic portfolio offers exposure to a broad range of developers and companies invested in cybersecurity, with no management fees.
*Your capital is at risk.
CopyPortfolios is a portfolio management product, provided by eToro Europe Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
CopyPortfolios should not be considered as exchange traded funds, nor as hedge funds.
Race to Net Zero: Carbon Neutral Goals by Country
Which countries have made a net zero pledge, and how strong is it? This map breaks down carbon neutral pledges.
Race to Net Zero: Carbon Neutral Goals by Country
The time to talk about net zero goals is running out, and the time to put them into action is well underway.
At the U.S. Climate Summit in April 2021, U.S. President Biden pressured countries to either speed up carbon neutral pledges, or commit to them in the first place.
It’s a follow-up to the Paris Agreement, which keeps signatories committed to reaching carbon neutrality in emissions in the second half of the 21st century. But 2050–2100 is a wide timeframe, and climate change is becoming both increasingly present and more dire.
So when are countries committed to reaching net zero carbon emissions, and how serious is their pledge? This infographic from the National Public Utility Council highlights the world’s carbon neutral pledges.
The Timeline of Carbon Neutral Targets by Country
The first question is how quickly countries are trying to get to net zero.
137 countries have committed to carbon neutrality, as tracked by the Energy and Climate Intelligence Unit and confirmed by pledges to the Carbon Neutrality Coalition and recent policy statements by governments.
But the earlier the pledge, the better, and most of the commitments are centered around 2050.
|Antigua and Barbuda||2050|
|Central African Republic||2050|
|Democratic Republic of Congo||2050|
|Papua New Guinea||2050|
|Saint Kitts and Nevis||2050|
|Saint Vincent and the Grenadines||2050|
|Sao Tome and Principe||2050|
|Trinidad and Tobago||2050|
|Australia||2050 – 2100|
|Singapore||2050 – 2100|
As far as early achievers go, Bhutan and Suriname are the only two countries that have achieved carbon neutrality and are actually carbon negative (removing more carbon than they emit). Uruguay’s 2030 target is the earliest to try and match that feat, followed by Europe’s Finland, Austria, Iceland, Germany, and Sweden, who are all targeting 2045 or earlier.
Over 90%, or 124 of the 137 countries tracked above, set a target of 2050 for reaching carbon neutrality. This is largely due to membership in the Carbon Neutrality Coalition, which asks member states to target 2050 for their goal but leaves commitment up to them.
Only five countries have net zero pledges set for after 2050, including Australia and Singapore, which haven’t set a firm target yet. Targeting 2060, in addition to Ukraine and Kazakhstan, is the world’s largest emitter, China. The country’s recent pledge is significant, since China accounts for an estimated 25% of global emissions.
In fact, according to the Climate Action Tracker, 73% of global emissions are currently covered by net zero targets.
How Seriously Are Countries Committing to Carbon Neutrality?
Setting a goal is perhaps the easiest step towards carbon neutrality. But the real challenge is in solidifying that goal and starting to make progress towards it. That’s why it’s important to consider how deeply committed each country’s carbon neutral pledge truly is.
The most rigid commitments are enshrined in law, followed by official government policy, though the latter can change alongside governments. Likewise, proposed legislation shows forward momentum in making pledges a reality, but proposals can take a long time to become enacted (or get derailed).
As it turns out, the vast majority of carbon neutral targets are only under discussion, with no formal action being taken to act on them.
|Costa Rica||Policy Document|
|Marshall Islands||Policy Document|
|South Africa||Policy Document|
|Vatican City||Policy Document|
|European Union||Proposed Legislation|
|South Korea||Proposed Legislation|
|Antigua and Barbuda||Under Discussion|
|Burkina Faso||Under Discussion|
|Cabo Verde||Under Discussion|
|Central African Republic||Under Discussion|
|Cook Islands||Under Discussion|
|Democratic Republic of Congo||Under Discussion|
|Dominican Republic||Under Discussion|
|Papua New Guinea||Under Discussion|
|Saint Kitts and Nevis||Under Discussion|
|Saint Lucia||Under Discussion|
|Saint Vincent and the Grenadines||Under Discussion|
|Sao Tome and Principe||Under Discussion|
|Sierra Leone||Under Discussion|
|Solomon Islands||Under Discussion|
|South Sudan||Under Discussion|
|Trinidad and Tobago||Under Discussion|
Uruguay’s 2030 target might be the earliest, but it is not yet set in stone. The earliest commitment actually enshrined in law is Sweden’s 2045 target.
Including Sweden, only six countries have passed their carbon neutral targets into law. They include Denmark, France, Hungary, New Zealand, and the UK.
An additional five countries have proposed legislation in the works, including Canada and South Korea, as well as the entirety of the EU.
Meanwhile, 24 countries have their climate targets set as official policy. They include Brazil, China, Germany and the U.S., some of the world’s largest emitters.
99 of the 137 pledges are only under discussion at this time, or more than 72%. That means that they have no official standing as of yet, and are harder to act on. But as time starts to pass, pressure on countries to act on their carbon neutral pledges is beginning to grow.
The National Public Utilities Council is the go-to resource for all things decarbonization in the utilities industry. Learn more.
How Workplace Culture Enables Investment Firms to Do Better
The importance of a positive workplace culture is becoming clearer than ever, but what does this mean for the investment industry?
Workplace Culture Enables Investment Firms to Do Better
In today’s highly competitive business environment, workplace culture is becoming increasingly recognized as a source of competitive advantage.
What does this mean for the investment industry, and how can asset managers use it to improve performance?
To find out, this infographic from Wells Fargo Asset Management explores the elements of a healthy culture, then shares four insights regarding the workplace of tomorrow.
The Top Cultural Edges to Develop
Workplace culture was gaining traction for several years prior to COVID-19, but after the disruptions experienced in 2020, its perceived importance has quickly escalated.
In light of this situation, the Thinking Ahead Institute, a non-profit dedicated to improving the efficacy of the investment industry, surveyed 27 asset managers on what they believe are the most important cultural edges to develop.
#1: Diversity, Equity & Inclusion (DE&I)
92% of respondents
DE&I was the top cultural priority by a wide margin, and it’s easy to see why given the industry’s well-documented lack of diversity. Boosting DE&I isn’t just about optics, however.
In a 2018 study, the Boston Consulting Group (BCG) surveyed 1,700 companies globally to learn how diversity affected their performance. They found that firms with above-average diversity on their management teams reported average innovation revenue of 45%, while those with below-average diversity reported it to be about 26%.
62% of respondents
Asset managers frequently apply innovative techniques within their portfolios. When it comes to business and operating models, however, innovation is much harder to come by.
The Thinking Ahead Institute identifies a number of characteristics that an innovative culture should possess:
|Incentives||The degree to which innovation is rewarded|
|Time scales||Whether the long time horizon associated with innovation is recognized and honored|
|Judgement capacity||Leadership is willing to challenge the status quo and make uncomfortable changes|
|Structure||Whether roles and organizational design allow innovation to flourish|
42% of respondents
In a recent survey of 300 asset owners, trust was identified as the most important factor for choosing an asset manager, even coming ahead of performance and fees.
|Factor||% of Respondents*|
|Good investment track record||42%|
|Low or no fees||21%|
*Question: Why did you originally select your financial advisor?
By fostering a culture of transparency, asset managers will find themselves better positioned to build deeper, more meaningful relationships with clients and prospects.
Four Insights Regarding the Workplace Culture of the Future
Lessons learned during the COVID-19 pandemic are likely to have a lasting impact on the way businesses operate. To get an idea of what this may look like, here are four insights regarding the workplace culture of the future.
#1: Health and wellness determine business success
Disruptions to normal life were a drain on U.S. workers, with 46% reporting mental health issues during the pandemic—an 18% increase over the prior year.
Moving forward, businesses that focus on wellness may find themselves with a more effective and resilient workforce. In one 2017 study, participation in employee wellness programs was found to increase productivity by 5% to 11%.
#2: Remote work continues to play a role
Over the course of the pandemic, businesses have learned that many of their normal operations can be conducted remotely.
To understand this operating model better, McKinsey & Company analyzed each industry’s potential for remote work. This was defined as the % of time spent on activities that can be done remotely, without any losses in productivity.
|Industry||Effective Potential (no productivity loss)||Theoretical Maximum|
|Finance & Insurance||76%||86%|
|IT and Telecommunications||58%||69%|
|Arts, Entertainment, and Recreation||19%||32%|
The Finance & Insurance industry has the highest potential for remote work, which is understandable given the industry’s large reliance on office jobs. Sectors such as Retail, which rely heavily on in-store workers, were among the least likely to benefit.
#3: Accelerated adoption of digital strategy
Lockdowns during the pandemic appear to have fundamentally changed the way businesses and consumers interact, resulting in a greater reliance on technology.
To compensate, executives from a variety of industries have reported making larger investments in digitization, particularly in terms of automation and employee communications.
#4: ESG investors pay greater attention to culture
As the benefits of culture become more well-known, investors are likely to give it a more significant weighting when analyzing the environmental, social, and governance (ESG) aspects of a business.
In a 2020 survey on responsible investment, 53% of respondents agreed that after the events of COVID-19, companies should disclose more details about their workplace culture and other social factors.
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