Rolando Grandi

Cybersecurity and AI – an unwavering alliance

Are hackers still lone wolves? Given the proliferation of cyberattacks across the world, it doesn’t look like it. Cybercrime appears to have scaled up. Thefts of data from nearly 10 million customers at the second largest telecom company in Australia this summer and, more recently, from patients at several hospitals in France, is clear evidence of this. Ransomware, malicious software that blocks access to a computer and demands a ransom to restore access, and phishing scams, fraudulent websites that pretend to be legitimate, are everywhere.

Switzerland is a target of choice for hackers and, as its Federal Council recently highlighted, cybersecurity is a major challenge for businesses and governments alike. The number of cyberattacks is increasing across the world, rising 31% in the space of a year1. In its Internet Crime Report, the FBI estimated that cybercrime cost €6.3 billion in 2021, up 81% on 2019. French businesses are estimated to have lost a billion euros in revenue to cybercrime since the beginning of 20222.

The digitalisation underway in several sectors, which has ramped up since 2020, has made the target much bigger for hackers and their increasingly advanced technologies.

Artificial intelligence is becoming a cornerstone of cybersecurity, given its ability to provide solutions that can be used to build data protection and threat detection strategies. Despite the more challenging macroeconomic backdrop, it’s vital that we increase our investments in cybersecurity. This affects every key sector, including healthcare, transport, energy and financial institutions.

Hackers are getting smarter, but so are cybersecurity companies. They are developing solutions to enhance cybergovernance at businesses and even data protection solutions, such as data center security systems. Zscaler3, a leading cloud security group from California, is seeing record demand for its cybersecurity solutions and has grown its revenue by 61% year-on-year. Other cybersecurity businesses, such as US company Cloudflare, are on its heels and benefiting from this trend.

Fighting digital fraud

MasterCard, a payment technologies pioneer, partnered with Microsoft in April 2022 to combat fraud and increase transaction security. The cloud solution created by the software giant draws on adaptive AI and machine learning to detect fraud in real time. It also provides banks with information so they can authenticate transactions. Banking cybercrime is a major challenge—Nilson estimates that bank card fraud will cost $409 billion over the next ten years.

A vast investment horizon

Driven by the rise in AI and the shift in architecture towards the Zero Trust model4, new generation businesses are capturing larger investments from clients. It’s difficult to imagine this new digital era moving backwards. AI is cybersecurity’s greatest ally, one that will only become more important as our businesses and lives move further online and become ever more connected. A vast investment horizon is looming.

1Accenture, 2021
2Anozr Way barometer published by Challenges, September 2022.
3The securities and sectors mentioned above are given by way of example. There is no guarantee they will remain in the portfolio or perform as expected over time.
4This architecture reverses the equation and requires every user—humans and software alike—to demonstrate that every action is legitimate. This especially helps avoid “Trojan horse” style attacks.
The opinions expressed in this document are the fund manager’s own. LFDE shall not be held liable for these opinions in any way.
The fund is exposed mainly to the risk of loss of capital, equity risk and currency risk.
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