In the first of a three-part series, I explore key areas for innovation in 2021
From remote working to a brave new world of digital healthcare, 2020 was another year where the impossible became possible through rapid advancements in technology.
Necessity spurred tech companies to fast-track plans and use technology to solve problems that were not even on the radar at the beginning of 2020. And now as we look forward to 2021, we will see the pace maintained but with a more intense focus on three areas – cyber security, digital health and applied artificial intelligence.
In this first article of three, I will explore opportunities for startups, investors and government in boosting Australia’s cyber security capability.
2020 presented cyber criminals with new opportunities. A pandemic was no reason for hackers to spare those on the front line such as government and healthcare businesses and the rapid rollout of remote working practices opened the cyber-crime floodgates.
As large proportions of the workforce switched to working from home and businesses transitioned to remote operations, ransomware attacks gained pace in 2020. Investigations company Kroll said ransomware was the most common security threat as gangs of cyber criminals infiltrated open remote desktop protocols. This is a tool that companies install to enable remote working which, if not correctly installed, leaves companies vulnerable to attack.
McAfee, a computer security software company, reported that during the second quarter of 2020 developments in innovative threat categories such as PowerShell malware escalated, and hackers adapted quickly to target businesses with large numbers of employees working from remote environments. McAfee said that COVID-19-themed cyber-attack detections increased by 605% in Q2 2020 and new malware samples grow 11.5% in Q2 2020, averaging 419 new threats per minute.
McAfee’s chief scientist Raj Samani said “What began as a trickle of phishing campaigns and the occasional malicious app quickly turned into a deluge of malicious URLs, attacks on cloud users and capable threat actors leveraging the world’s thirst for more information on COVID-19 as an entry mechanism into systems across the globe.”
High profile cyber-attacks last year in Australia have included Lion, Fisher & Paykel and Honda. Logistics business Toll was also subject to two major ransomware attack that forced it to close internal and customer facing systems, losing track of all deliveries. Last month, the Nine Network was subject to a cyber attack, affecting its broadcasting and news publishing operations. These attacks on corporate Australia will become ever more common as remote working is embedded for the long haul.
The Australian Government is viewed as particularly vulnerable for future attacks and is under pressure to increase its defences against cyber criminals. Reports suggest that underinvestment will make the Australian Government an easy target for criminal and state-based hackers. Government departments invest less than half the money per employee on securing their technology and data according to the CISO Lens Benchmark 2020 report.
As the hackers change tack, technology to prevent and remediate must also evolve. There is an opportunity for Australian startups to claim a piece of the $147 billion-a-year global market in cyber security products and services.
Industry body AustCyber’s competitiveness plan 2020 reveals the domestic cyber security market will generate $3.6 billion in revenue this year. This is a 20 per cent increase from 2017 and adds a gross value to the Australian economy of $2.3 billion a year. This figure is expected to more than double to $7.6 billion by 2024 as well as adding around 7000 new jobs. This would bring the total cyber security workforce to 33,500 positions in Australia.
In 2021 we expect to see more tech startups taking advantage of the opportunity to meet ever-changing cyber threats. These startups will develop IT security or electronic information security solutions to defend computer systems and networks from theft or damage to their hardware, software or electronic data.
Already a number of Australian companies are stepping in to build capability in this market. Cydarm helps larger organisations manage incidents when there is a breech, by helping businesses to manage the workflow and providing the tools to allow teams to manage attacks. Such attacks are inevitable, so remediation and business continuity are as essential as preventative measures.
Another of Australia’s bright young startups helping business to fight cyber-crime is Detexian. This early-stage business helps IT administrators secure their systems according to best practice, as well as monitoring for changes in baseline security settings. These changes may indicate an internal actor or infiltrator preparing to launch an attack. Security platform Horangi is also filling the gap with technology that scans networks and end points such as PCs to provide reports on sources of threat.
In 2021, investors will be presented with even more opportunities to support local startups. For this sector to thrive on the global stage, greater support from government will also be needed to fund research and foster an environment that is conducive to both attracting top talent and exporting to global markets.
- Benjamin Chong is a partner at venture capital firm Right Click Capital, investors in bold and visionary tech founders.