Cybersecurity between VC investments and AI technologies

Cybersecurity has become an essential part of the digital world and affects both companies and private individuals. In an increasingly networked and digitalized society, we are confronted with a variety of cyber threats on a daily basis, ranging from data leaks to hacker attacks.

Additionally, cybersecurity has a crucial social dimension. Advancing digitalization not only influences our daily lives, but also the functioning of governments, public institutions and services that form the foundation of our society. Election manipulation with the help of hacks has long been a major issue. It is now becoming even more important considering current geopolitical tensions.

To Commerzbank, cybersecurity is of fundamental importance. Its customers – private individuals and companies of all sizes – expect security and seek advice and support from Commerzbank’s experts on cybersecurity issues. That’s why cybersecurity is also a topic here at Neosfer. It ranges from simple password protection to sophisticated AI systems. In this blog post, we analyze the current trends and challenges that will shape the year 2024.

Cybersecurity has been a hot topic for VC investors in recent years, but deal activity in 2023 has decreased significantly compared to previous years. Both the total number of deals and the amount of financing have declined.

To put this into context: since 2023, VC financing has declined in virtually all sectors. Such a decline is not synonymous with declining interest, though, but may simply indicate that a topic is normalizing at a lower level after its peak. As the threat of cyberattacks increases rather than decreases, cybersecurity remains of paramount importance. Despite all the fluctuations, it is therefore likely to remain an important topic for VC investors in 2024. There are even good reasons to assume that it will become increasingly important after the low point in 2023.

One such reason is the development of artificial intelligence into an indispensable tool in the fight against cybercrime. The ability of AI algorithms to recognize patterns, identify anomalies and combat threats in real time makes them an indispensable tool for companies and governments worldwide. By using AI, security vulnerabilities can be detected and rectified more quickly and preventive measures can be implemented more effectively.

We are observing a kind of arms race – both on the part of the attackers and the defenders.

On the one hand, attack methods are becoming increasingly precise with the help of AI and can now be automated, too. Deepfake technologies, for example, are able to create deceptively real fake videos that can be used to spread false information and be instrumentalized for social engineering attacks.

On the other hand, there are companies, government organizations and individuals who need to protect themselves from the increasing number of AI-based cyberattacks. Clearly, this is where artificial intelligence comes into play again, only differently than on the criminal side: the challenge is to design the use of AI in such a way that it is both safe and ethical, and to ensure that one’s own technology is not misused for malicious purposes. (On the question of whether banks should develop their AI themselves or buy it, host in the cloud or themselves, I recommend this blog post by my colleague Dennis Eberlein).

The second main reason for a possible renaissance of cybersecurity deals: progress in the area of cloud security. The increasing use of cloud technologies opens up exciting opportunities for companies to increase efficiency and innovate. At the same time, however, new attack vectors and threats are emerging. This sub-area of cybersecurity is referred to as cloud security, meaning all practices, technologies and processes aimed at protecting data and applications in cloud environments from unauthorized access, data loss and other security risks.

Innovative solutions based on AI and advanced automation technologies are required to guarantee the highest level of security. Cloud security must be ensured not only at the infrastructure level, but also at the identity and data level. Companies migrating fully or partially to the cloud must therefore adapt their security strategies and increase their vigilance in the cloud.

One example of an innovative solution in the field of cloud security is the start-up Cyberdesk, which has developed software for the secure and traceable management of company data in the cloud. Co-founder Tobias Lieberum emphasizes the importance of innovative solutions in the field of cloud security:

“Cloud computing and AI are fundamentally changing how we work with data. 90 percent of the world’s data has only been created in the last two years. In addition to huge opportunities for data-driven business models, this progress also poses considerable challenges for cyber security.”

He says that in the cloud, data and applications are no longer just localized within a physical network perimeter, but distributed across a multitude of globally accessible services, explains the security expert. The focus is shifting from the traditional firewall to a data-centric security strategy based on identity management, according to Lieberum.

The exponential development of technology presents our world with numerous challenges, from regulatory and social issues to political and economic ones. If things continue at the pace of recent years, cybersecurity will have to penetrate more and more areas of society because the threats are also becoming broader, bigger and faster. So we – companies, governments, ordinary people – will also need new innovative solutions to effectively counter the growing threats. We at neosfer are keeping a close eye on this development.