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Cybersecurity market to exceed $100 billion by 2020; financial losses caused by cybercrime to reach $2 trillion

The fear of being hacked, of losing confidential information or state secrets, or of being blackmailed to get them back will drive annual global cybersecurity spending above $100 billion by 2020, according to IDC, cited by HOTforSecurity. Banking will make the most significant expenditure – $8.6 million – and the US will be the largest market. On the other hand, it’s been estimated that cybercrime led to financial losses of more than $500 billion in 2015 alone, potentially doubling that in 2016, and reaching $2 trillion by 2019.

Recent cyber threats in the financial sector and the SWIFT hack have prompted the G-7 Cyber Expert Group to release some key elements to help countries build better cybersecurity strategies, because it’s only going to get worse. As fear turns out to be the biggest catalyst, IDC has released some predictions about global spending on improving cybersecurity, especially in the banking sector.

“Today’s security climate is such that enterprises fear becoming victims of the next major cyberattack or cyber extortion,” said Sean Pike, program vice president, Security Products. “As a result, security has become heavily scrutinized by boards of directors demanding that security budgets are used wisely and solutions operate at peak efficiency.”

Cybersecurity budgets will be spent on hardware, software with endpoint security, identity and access management, user behavior analytics and services. It is forecast to develop into one of the most important divisions, with a 38 percent increase by 2020 delivered by banking, government, discrete and process manufacturing. With a 10.3% CAGR, healthcare will register the fastest growth in security investments, followed by telecommunications.

“The pace and threat of security attacks is increasing every year, especially across compliance-driven industries like healthcare, telecom, government and financial services,” said Eileen Smith, program director, Customer Insights and Analysis. “In addition to the traditional challenges of risk and regulatory compliance, digital transformation and the use of 3rd Platform technologies are putting even more pressure on organizations across all industries to develop and execute on a new generation of security measures.”

Worldwide spending on information security products and services will reach $81.6 billion in 2016, an increase of 7.9 percent over 2015, according to Gartner’s recent forecast.

Consulting and IT outsourcing are currently the largest categories of spending on information security. Until the end of 2020, the highest growth is expected to come from security testing, IT outsourcing and data loss prevention (DLP).

"Organizations are increasingly focusing on detection and response, because taking a preventive approach has not been successful in blocking malicious attacks," said Elizabeth Kim, senior research analyst at Gartner. "We strongly advise businesses to balance their spending to include both."

According to Gartner, spending in security markets such as consumer security software, secure email gateways (SEGs) and endpoint protection platforms (EPPs) continues to show constrained growth due to commoditization.

Gartner's latest forecast also includes these assumptions:

The average selling price for firewalls is expected to increase by at least 2 or 3 percent year over year until the end of 2018.

By 2018, 90 percent of organizations will implement at least one form of integrated DLP, up from 50 percent today.

Public cloud adoption will impact firewall spending by less than 10 percent until the end of 2019 but will have an impact after that.

Half of midsize and large organizations will add bigger, more advanced inspection-oriented features to their network firewalls by 2019.

Last year, Gartner predicted worldwide information security spending will grow 4.7% to reach $75.4 billion in 2015. According to a RAND Corporation study, the cost of managing cyber-security is expected to increase 38% over the next 10 years, reaching almost $100 billion, as companies spend more on cybersecurity tools. Worldwide spending on cybersecurity has already passed the $70-billion-a-year threshold and is growing 10% to 15% annually.

Source URL: businessinsights.bitdefender.com/cybersecurity-market-cybercrime-losses

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