Welcome to The Word on Wall Street
Welcome to the second edition of the Global Affairs section’s finance column, The Word on Wall Street. In this space, Alice Grant will be addressing the latest news in the world of global finance. Stay tuned for reflections and analysis of industry trends and international developments.
The Growth of Cybersecurity in the United Kingdom
With the implications of international and domestic cyber attacks becoming ever more stark, there is no doubt that the growth we have witnessed in the UK Cyber industry is integral for the future of national, corporate, and individual security.
Only last week, the Financial Times reported that law firm Allen & Overy was the victim of a ransomware attack. A report by the Cyber Resilience Centre found that the risk of cyber attacks on corporate law firms has risen to 73% since 2019. It was even more alarming, however, when the Industrial and Commercial Bank of China (ICBC), the world’s biggest lender according to CNBC, was targeted by a cyberattack demanding ransom on November 8th. One of the global repercussions of this infiltration was large-scale disruption to the US treasury trade market. On the international front, it has been interpreted as highly damaging to a nation’s reputation that state-owned banks have such weak security.
Nonetheless, there have been many positive developments in UK finance and technology to combat cyber threats. An article from the Times recently highlighted the way in which the UK is rapidly becoming a leading country for venture capital funds; notably the cybersecurity industry, one of our fastest growing markets.
The political weight that has been thrown behind cybersecurity is a key component at driving this growth. The government recently launched a blueprint to ‘solidify [the UK’s] position as a global cyber power’ known as the National Cyber Security Strategy, which is principally aimed at bolstering national protection against cyber threats. The international agenda is also clear: in an ever fragile geopolitical climate, it is imperative that the UK moves away from a dependence on international suppliers for cyber technologies which may interfere with the national interest. As for how successful this endeavour will prove, only time will tell – though it remains an important step forward.
Financial Markets
Last year £302 million was raised across over 75 deals in cybersecurity firms. This is naturally predicted to rise, and with dedicated cybersecurity venture capital firms the diversity of different firms is hugely exciting. From early stage UK cyber companies, to giants like Mimecast, Copper, Darktrace and Aroit, which collectively are worth $10.3B billion; our generation has a unique opportunity to grasp and mould this industry.
Geopolitical tensions are of course a pressing factor driving growth, but so is the rise of crypto assets, such as digital currencies, which has necessitated increased security as fears of data breaches and fraud arise. It is estimated in a report by Mordor Intelligence that the UK cybersecurity market size will reach $USD 23.37 billion in 2028. This impressive figure is tied to the UK’s position as one of the most attractive countries for start-ups, especially in technology.
The economic, political, and global power of cybersecurity is eminently clear. The industry has created over 46,000 domestic jobs with nearly 2,000 active businesses. As the UK continues to emerge as a hub for cyber investment, it is for our generation to pioneer this field which is so vital to global security.