The cybersecurity market has nosedived with the threat of a global recession looming. But advancing technology and a move to more remote working due to the COVID-19 outbreak may cause the value of cybersecurity to soar.
Stock markets across the world experienced one of their worst months from the fear of a recession caused by the coronavirus. Leaders in cybersecurity like Palo Alto Network, Splunk and CrowdStrike were not immune, as they suffered stock price drops of over 15% in March.
Cybersecurity companies Palo Alto and FireEye have supply chains in Asia and are said to be closely monitoring the situation. Representatives at FireEye wrote: ”The recent coronavirus outbreak or the spread of a pandemic influenza, could impair the total volume of components that we are able to obtain, which could result in substantial harm to our results of operations.”
Cybersecurity will rise from the ashes
Despite plunging stocks, the threat of cyberattacks is not going away. In fact, more remote working caused by stay-home notices and unrest from the outbreak may leave companies vulnerable and in need of stronger cybersecurity.
A huge increase of more than 600% in cyber threat indicators related to the pandemic was identified by CYFIRMA through research into the dark web and hackers’ forums. The cybersecurity firm based in Singapore found that hackers are looking to target governments and businesses by taking advantage of public fear and uncertainty.
The World Health Organisation recently reported it was the target of elite hackers DarkHotel operating in East Asia. The organisation also warned of criminals posing as the WHO to steal money or sensitive information via email.
While COVID-19 may be one of the largest security threats the world has seen, cyber threats in Southeast Asia are far from new and will exist long after the coronavirus calms down.
Vietnam suffered more than 6,200 cyber attacks in seven months and 94% of Vietnamese enterprises were victims of information breaches, while the Philippines ranked the 7th most attacked country in the world by Kaspersky’s report from October to December 2019.
Regulations require reactions
Countries across Southeast Asia are implementing laws to crack down on cyber threats and ensure firms are compliant, making cybersecurity even more valuable to avoid financial and criminal penalties.
Thailand will join Singapore and Malaysia in enforcing a Personal Data Protection Act, coming into force on 27 May 2020. This will require firms to prevent breaches or face a fine of up to THB500,000, six months imprisonment or both.
Along with data protection laws, many countries have implemented cybersecurity acts to allow commissioned bodies to investigate cyber threats.
Companies are advised to adapt to varying regulations and perform cybersecurity audits to stay compliant and future-proof. Firms should also expect revisions to current acts as well as new acts by governments where laws are currently more relaxed like Indonesia.
Cybersecurity investors look to Southeast Asia
Spending in the ASEAN region is rising by an average of 15% per year.
Malaysia recently launched a Cybersecurity Lab with Austrian service provider TÜV Austria. The Austrian Ambassador Dr. Michael Postl said: “This partnership has the potential to establish Malaysia as a hub for cybersecurity testing and certification for the Asia Pacific region.”
Successful funding rounds by two Singaporean cloud-based cybersecurity organisations also provided an optimistic outlook for the industry. CYFIRMA raised $8 million to accelerate their business expansion and Horangi gained US$30 million to fuel its expansion into Southeast Asia and Indonesia in particular.
Organisations with weak cybersecurity measures should revise their processes and business continuity plans to remain future-proof and protected against cyber attacks as well as pandemics that may damage your market value.
And with the potential for greater adoption of cloud-based platforms and digitisation encouraged by more remote working and technological advancements, investors should consider the potential value of innovative cybersecurity startups taking off in the near future.