To examine this from an Asia perspective is Rahul Bhushan, who is managing director of , a provider of specialist exchange-traded funds with a thematic approach. The editors are pleased to share this content; please jump into the conversation if you have views. The standard editorial disclaimers apply to views of outside contributors. Email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Cyber fraud is rising at an alarming rate.

As the ubiquity and capabilities of AI advance, so too do the number of criminal organisations using the technology to power large-scale fraud and money laundering.

These “bad actors” are already responsible for billions of dollars in financial losses. And they are presenting a new threat to national defence in the face of ongoing geopolitical volatility. 

Today, we are more reliant than ever on cybersecurity, and this is unlikely to change as the power of AI continues to grow. It is an urgent situation, for sure. But it is also creating a once-in-a-generation investment opportunity.

With the value of the cybersecurity market expected to grow from $24.3 billion in 2023 to nearly $134 billion by 2030, early investors in the stocks driving this space forward stands to generate outsized long-term returns (1).  

The severity of cyber fraud 
The urgent need to combat cyber fraud was highlighted just a few weeks ago by none other than the United Nations. In a report released as part of Cybersecurity Awareness Month, the organisation detailed the alarming rise of digital crime in Southeast Asia.

According to UN experts, cyber fraud has evolved into a billion-dollar industry in the region. Transnational criminal networks are harnessing new technologies such as generative AI and deepfakes to create fraudulent schemes and launder billions through under-regulated virtual asset service providers and online gambling platforms.

With losses from cyber fraud having already reached an estimated $37 billion in 2023, it would appear that governments are struggling to keep up as the sophistication of AI grows.

Cyber fraud isn’t just a problem in Southeast Asia, though. The convergence of AI and deepfake technologies has amplified concerns over political manipulation and disinformation globally.

Deepfakes, which can convincingly alter video and audio content, have the potential to influence public perception, disrupt democratic processes, and even alter election outcomes. This adds another layer of urgency to the need for robust cybersecurity defences worldwide – something highlighted extensively in the run up to the recent US election.

Likewise, amid conflicts in Lebanon and Gaza, the potential for an Israeli attack on Iran, and heightened tensions globally, critical infrastructure, national defence systems, and financial markets are all potential targets for cyberattacks around the world.

The role of cybersecurity
These issues all underscore the crucial role that cybersecurity now plays in detecting and neutralising digital threats before they cause widespread harm. The sector no longer exists just to protect businesses – it has become a fundamental component of national defence.

As governments and corporations recognise the need for enhanced cybersecurity, spending in this sector is projected to exceed $300 billion annually by 2026. This figure will only increase as AI continues to evolve and new technologies emerge.

For investors, the cybersecurity sector offers both growth potential and the opportunity to play a part in defending against some of the most pressing global threats of our time.

Companies such as SentinelOne and Zscaler are particularly well positioned, driven as they are by cutting-edge solutions in an increasingly hostile digital landscape.

SentinelOne is a leader in cybersecurity, providing real-time protection against cyber threats. The company’s AI-driven platform offers endpoint protection that automatically detects and neutralises ransomware, malware, and phishing attacks, making it highly effective against the same technologies criminals are using to enhance their operations. 

SentinelOne’s approach is particularly relevant as AI continues to be a double-edged sword – used both by cybersecurity companies and cybercriminals alike.

Zscaler, meanwhile, specialises in protecting cloud environments – an area that has become increasingly vulnerable as more organisations adopt digital infrastructures. The company’s growth, with a projected $5 billion in annual recurring revenue, is indicative of the rising demand for cloud security in regions where cyber-enabled fraud is on the rise.

Zscaler’s Zero Trust Exchange architecture ensures that no user or device is trusted by default, securing access to cloud applications and critical systems. This level of security is particularly vital as cybercriminals exploit weaknesses in virtual asset platforms and cloud environments to facilitate money laundering and other illicit activities.

First-mover advantage
As long as AI continues to advance, so too will cyber fraud. This guarantees cybersecurity’s position as an increasingly critical sector long into the future. 

Investors backing the companies leading the fight against the growing nefarious trend stand to benefit most as cybersecurity spending continues to proliferate at increasingly large multiples.

Footnote:
1,  https://www.statista.com/statistics/1450963/global-ai-cybersecurity-market-size/#:~:text=Value%20of%20the%20AI%20cybersecurity%20market%20worldwide%202023%2D2030&text=While%20valued%20at%2024.3%20billion,billion%20U.S.%20dollars%20by%202030