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Why the Growth of AI Should Benefit Cybersecurity

ETF Market Canada - Wed Feb 28, 5:52AM CST

As the societies digital usage increases, the risk of cyberattacks on corporations and individuals also rises. As reported by Cybersecurity Ventures, a leading researcher and publisher covering the global cyber economy, cybercrimes caused global damages that cost $6 trillion in 2021. The value attributed to these activities is expected to grow by 15% annually over the next five years, with experts estimating the damages incurred number to exceed $10.5 trillion by 2025. Though the nature of this issue may sound daunting, it is not without a solution, as artificial intelligence (AI) has become an important weapon in the fight against these cyber threats. This article will highlight the way AI is elevating the cybersecurity landscape and investment solutions that investors can utilize to gain broad-based exposure to an essential safeguard of our modern, digital economy. 

Elevating the landscape with AI

In the realm of cybersecurity, AI holds immense potential to bolster defenses, mitigate threats, and enhance overall resilience against evolving cyberattacks. As the digital landscape continues to expand, so do the complexities and challenges associated with cybersecurity. Traditional cybersecurity measures are often inadequate against sophisticated cyber threats, necessitating innovative solutions. The growth of AI presents a promising avenue for enhancing cybersecurity capabilities, offering opportunities for proactive threat detection, rapid response, and adaptive defenses.

Ways in which AI is enhancing cybersecurity

Threat Identification and Prevention

AI models excel in threat identification. They can examine vast volumes of data from many sources and spot odd user behavior patterns that might point to a cyberattack. AI can instantly detect a shift in an employee’s behavior, such as when they unintentionally click on a phishing email and notify us of a possible security violation.

In the case of malware and phishing attacks, AI can distinguish between what’s real and what’s otherwise and stop suspicious activity before it compromises the company networks. Given the depth of user data that can be fed into AI programs, the ability to identify and address possible security breaches by spotting trends and abnormalities, even without established threat signatures, is a possible outcome. Simply put, AI allows organizations to improve user account security in a multi-level fashion.

Breach risk prediction

The sophistication and growing frequency with which cybersecurity breaches occur are undoubtedly growing in frequency. For organizations that may not be aware of where they may be vulnerable within their technological infrastructure, AI algorithms can predict the types of attacks and even identify the components most vulnerable to a breach. For organizations seeking to build cyber resilience and prepare for future assaults by getting early notice of hacks and breaches, AI can identify where the gaps and potential weaknesses are in their system before they are exploited by bad actors.

Reduction of human error

Human error tends to account for a significant portion of cybersecurity threats, as such, security systems that utilize machine learning can limit manual tasks that require human interaction. By automating security tasks and operations, the risk exposure that an organization is exposed to is reduced significantly.

Investing in the cybersecurity industry

The cybersecurity industry is filled with establishing and evergreen firms, given that companies will not reduce their spending on digital safety and net new cyber threats are always arising. With the proliferation and adoption of AI, some cybersecurity firms have built comprehensive business models around the security efficacy of AI platforms. For example, SentinelOne, Inc. provides a machine learning-based solution for monitoring and securing laptops, phones, containerised applications and the many other devices and services connected to a network. The company's AI platform utilizes mathematical optimization to quickly identify and remediate identified issues. Another firm, Palo Alto Networks, is one of the largest cybersecurity companies in the world. It operates three main platforms: Strata for its next-gen firewalls and on-site networking appliances; Prisma for its cloud-based security services; and Cortex for its artificial intelligence (AI)-driven threat detection tools. Regarding Cortex, it is highly regarded in the cybersecurity industry, recently receiving the 2023 Tech Ascensions Awards and being utilized by notable firms, such as IBM.

Given the vastness of the cybersecurity industry, investors interested in gaining exposure are best served by utilizing investment solutions that provide comprehensive exposure, allowing them to benefit from the innovative success each firm may garner. Detailed below are some ETF solutions worth considering.

  • First Trust Nasdaq Cybersecurity ETF (Ticker: CIBR): The fund seeks investment results that correspond generally to the price and yield of the Nasdaq CTA Cybersecurity Index™; which is designed to track the performance of companies engaged in the cybersecurity segment of the technology and industrials sectors. It includes companies primarily involved in the building, implementation, and management of security protocols applied to private and public networks, computers, and mobile devices to protect the integrity of data and network operations.
  • Horizons GX Cybersecurity Index ETF (Ticker: HBUG): The fund seeks investment results that correspond generally to the performance of the Indxx Cybersecurity Index; which provides global exposure, to publicly-listed companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is generally engaged in the development and management of security protocols preventing intrusion and attacks to systems, networks, applications, computers, and mobile devices.
  • Evolve Cyber Security Index Fund (Ticker: CYBR): The fund seeks to replicate the performance of the Solactive Global Cyber Security Index Canadian Dollar Hedged. The fund invests primarily in equity securities of companies located domestically or internationally that are involved in the cyber security industry through hardware and software development.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.

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