When one virus can hide another...
The current pandemic is a reminder of the risks of a globalised economy but is also demonstrating the
formidable capacity for adaptation and innovation throughout the world, be it in the medical or technology area. The already major need for digitalisation has in this manner been further reinforced, in return exposing organisations even more to the risks of cyber attacks. With the increased use of teleworking and the shift in favour of more decentralised IT systems, cyber defense systems are also more vulnerable. Cyber security, a challenge often integrated into ESG analysis, is consequently increasingly demonstrating its pertinence in the assessment of financial risks.
In its most recent study covering thousands of companies in Europe, the Hiscox specialty insurance company indicated that 61% of the companies had been hit by a cyber incident in 2019 versus 45% in 2018. For its part, the average cost for the victimised companies in its sample rose from €229,000 to €369,000 over the same period. The FBI estimated last February that these attacks had caused $3.5bn in losses in North America over the year. This phenomenon appears to have accelerated recently. According to the French financial publication Les Echos, cyber attacks against banks tripled during the lockdown period, with the Parisian hospitals announcing at the end of the March that they too have been targeted and Interpol sounding the alarm about the sharp rise in attacks since the beginning of the year.
In response to this scourge, 67% of the companies included in the Hiscox study indicated that their
cyber security budget would increase this year. This demand is consequently boosting growth at
specialised players that can be found throughout the world. In Japan, TechMatrix is integrating the best technologies in each area within organisations and has just recorded a 73% increase in its operating profit over the last three months. In the UK, Kape Technologies stands out in data security and protective software and should show even stronger growth. In Finland, F-Secure offers mass-market software that often stands out in comparison to giant such as McAfee and Norton and is also developing rapidly in corporate consulting. Finally, in the United States, Zix already equips 30% of banks and 1,200 hospitals with its e-mail encryption and data theft protection solutions, thereby providing increased security for two particularly sensitive sectors.
The broad diversity of the worldwide universe of microcaps, generally made up of niche players such as cyber security companies, enables us to select and accompany these growing small and mid-sized companies through the Mandarine Europe Microcap and Mandarine Global Microcap funds.
by Microcap team, August 2020.
Image source: Piixabay