Why You Should Care About Cybersecurity

When the New York Stock Exchange halted last week, many feared it was due to a cyber attack. Although it was actually due to systemic issues, the media craze made it clear how concerned the American public is about cybersecurity.

“There's been so much research that's come out that one of America's largest fears is becoming a victim of a cyber attack.” PureFunds CEO Andrew Chanin told us.

While cybersecurity has been an issue for many years in the IT and software space, its prevalence has grown tremendously over the past few years.

From celebrities having their private photos leaked from their Apple Inc. AAPL iCloud accounts, to the massive hack attack on Sony costing the company millions of dollars, to President Barack Obama’s State of Union address focusing on cybersecurity earlier this year, it has been difficult to ignore that cybersecurity could be a real threat to individuals, companies and governments alike.

A Hot Sector

Many people speculate that cybersecurity is the next hot sector due to its great performance so far this year as well as in 2014.

The YTD PureFunds ISE Cyber Security ETF HACK

This is largely due to its applicability to basically everyone who goes online.

“If I'm the average person, I'm not going to be paying attention to what some of the companies are doing, but I'm going to be paying attention to how I act online, making sure that my credit card information is secure, other banking information is secure, my social security number is not out there, and then if I'm an investor in the space, I’m paying attention to attacks.” Chris Ciaccia, technology editor at TheStreet.com, told us.

Most companies now are forced to spend time and money on cybersecurity due to the risk of a breach.

Chanin thinks there’s a unanimous agreement that companies can’t put their heads in the sand and say “It won’t happen to us. Or if it does happen to us, we’ll figure it out.”

He went on: “No one wants to be the next hacking victim and because of that I think that corporations and corporate spending on cybersecurity, as well as government agencies, could potentially be a very large driver for cybersecurity spending going forward and if these companies are going to deploy a significant amount of capital to protection in cybersecurity defense and protection that could be beneficial to companies in the cybersecurity space.”

Cybersecurity is also a concern when it comes to international relations.

“You have countries such as China and Russia who are seemingly almost always at odds with the United States with regards to diplomatic policies so as these countries are having diplomatic differences, there's always the threat and possibility that these countries, as well as others, have cyber hacking terrorists who could try to infiltrate our networks to either disrupt them or get certain information.” Ciaccia said.

What’s next?

“We have seen major leaks, but we haven't seen the fall out of the significant damage from cyber security. We've mainly seen embarrassment and concern but we haven't seen that event that scares the daylights out of people and that could certainly be another catalyst for the industry,” Chanin told us.

Until then, and perhaps in preparation due to this sense of impending tragedy, it seems that the cybersecurity sector is here to stay.

Companies are hiring computer security companies such as FireEye Inc. FEYE – which Sony hired to work out its mess – to protect their systems.

Ciaccia speculates that we could potentially see a tech giant like Cisco Systems, Inc. CSCO acquire a cybersecurity company, adding that there are a few specific companies that stick out as leaders in the sector.

Gabrielle Iorio contributed to this article.