The cyber security opportunities emerging from booming 'bad actor' activity
Digital crime jumps in face of pandemic
Enforced homeworking as a result of the ongoing lockdown in the UK has led to an increase in "bad actors" exploiting individuals and businesses at a time of crisis, but this has also created investment opportunities within the cyber security sector.
Coronavirus-related attacks come at a time of increasing cyber crime, with the number of such offences reported to the National Fraud Office jumping from 273,598 to 306,126 between 2017 and 2018.
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Similarly, there is a growing trend of cyber attacks on UK financial services firms, with the Financial Conduct Authority reporting last year a 480% year-on-year increase in the number of regulated firms targeted.
According to email fraud security specialist Proofpoint, cyber criminals have also been using coronavirus as a means of manipulating users through fraudulent activity.
Since 29 January, Proofpoint has recorded 500,000 messages, 300,000 malicious URLs and 200,000 malicious attachments with coronavirus themes across more than 140 campaigns.
Stephen Zucknovich, chief technology officer at asset management digital services provider Kurtosys Systems, explained that home working exacerbates cyber risk as "most companies had cyber controls in place that were dependent on the buildings they operated from".
He added: "With increased use of online services comes higher exposure to cyber crime. In fact, we are seeing a higher incidence of attempted fraud, as hackers try to exploit the current situation."
Head of cyber and privacy at KPMG UK Martin Tyley added that sophisticated techniques incorporating artificial intelligence or ‘deepfakes', for example, are becoming more common, and leading to a rise in "customised and targeted phishing campaigns as well as more driven social engineering activity".
He added: "It is common knowledge most of us are working from home and for many that is new. That means new ways of working and communicating with each other which is what represents the risk - the more bad actors know about you, the more convincing they can be in impersonating others."
Demand surge
Associate director for equity funds at Gresham House David Leahy identified two portfolio holdings set to benefit from the surge in interest in cyber security; Kape Technologies and SysGroup.
Leah said Kape Technologies has already reported a "surge in demand", primarily withing VPN products which "allow users to securely access files and networks from a remote location".
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He added: "The increased need for teams to collaborate on shared documents and resources remotely has underlined the importance of cyber security and will continue to benefit Kape Technologies."
Meanwhile managed IT services and cloud infrastructure provider SysGroup is set to benefit from the growing number of companies valuing "reliable, secure operators".
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