What is Cybersecurity and Why is it Important?
Cybersecurity focuses on protecting computers, networks, programs, and data from unauthorized and/or unintended access. Cybersecurity has become increasingly important recently as governments, corporations, and people collect, process, and store vast amounts of confidential information and transmit that data across networks. Data breaches have become almost commonplace in recent years. Over the last few years, high-profile cases of cyber hacks have increased the demand for sophisticated software and security products. Companies across the globe are growing more aware of the potential threat which is leading to a greater allocation of resources towards companies that help mitigate such risks.
The table below highlights the variety of ways in which industries were affected by different types of incidents. While certain industries experience cyberattacks from specific incidents (e.g. about 45% of incidents in 2019 in the Accommodation industry were because of Point-of-Sale)1, this table shows that all industries are prone to cybercrime in numerous ways. As such, with the sophistication of cyberattacks, there has been an increased demand for cybersecurity services.
One way in which investors can get exposure to the cybersecurity industry is through the Nasdaq CTA Cybersecurity Index (NQCYBR). In order to adequately understand the reasons as to why cybersecurity is important from an investment perspective, it is first vital to understand the growth drivers for cybersecurity as well as the industry outlook. The following research will discuss the growth drivers and industry outlook for cybersecurity and then show the ways in which NQCYBR is poised to capture these positive trends in the cybersecurity industry.