New UN Report Unveils Multi-Billion Dollar Cyberfraud Industry in Asia

October marks the annual Cybersecurity Awareness Month, and it was no surprise to see the UN publish its latest report highlighting the alarming rise of cyberfraud in Southeast Asia. Criminal organisations are increasingly using AI, deepfakes, and cryptocurrency to facilitate large-scale fraud and money laundering, resulting in billions of dollars in financial losses. With this backdrop, cybersecurity companies like SentinelOne and Zscaler are becoming essential in combating these emerging threats. In this blog, we discuss the growing role of these cybersecurity firms and the investment opportunities they present.

The Growing Cybercrime Threat in Southeast Asia

According to the UN’s report, cyberfraud in Southeast Asia has evolved into a billion-dollar industry, with transnational criminal networks using new technologies like generative AI and deepfakes. The rise of deepfake-driven fraud has been particularly shocking, with a 600% increase in mentions of deepfake-related content across online criminal platforms in the first half of 2024. Criminals exploit these technologies to create fraudulent schemes and launder billions through underregulated virtual asset service providers (VASPs) and online gambling platforms.

With estimated losses from cyberfraud reaching between $18 billion and $37 billion in 2023, Southeast Asia has become a hotspot for cybercrime. Governments are struggling to keep pace with these increasingly sophisticated methods, highlighting the urgent need for advanced cybersecurity measures. This situation underscores the crucial role cybersecurity companies play in both protecting economies and combating the expanding influence of criminal networks.

SentinelOne: AI-Driven Defence in the New Threat Landscape

SentinelOne is a leader in cybersecurity, using artificial intelligence to provide real-time protection against cyber threats. Its AI-driven platform offers endpoint protection that autonomously detects and neutralizes ransomware, malware, and phishing attacks, making it highly effective against the same technologies criminals are using to enhance their operations. SentinelOne’s approach is particularly relevant as AI continues to be a double-edged sword—used both by cybersecurity companies and cybercriminals alike.

As organised crime syndicates grow more sophisticated, SentinelOne’s AI capabilities allow it to respond to threats in real-time, without needing human intervention. This makes it a valuable tool in fighting the types of AI-powered fraud and deepfake-driven scams that are currently proliferating in Southeast Asia. The company’s focus on automation, combined with its ability to adapt to evolving threats, positions it as a key player in the ongoing battle against cybercrime.

Zscaler: Securing the Cloud in an Age of Cybercrime

Zscaler, another critical player in the cybersecurity landscape, specializes in protecting cloud environments—an area that has become increasingly vulnerable as more organizations adopt digital infrastructures. Zscaler’s Zero Trust Exchange architecture ensures that no user or device is trusted by default, securing access to cloud applications and critical systems. This level of security is particularly vital as cybercriminals exploit weaknesses in virtual asset platforms and cloud environments to facilitate money laundering and other illicit activities.

As Southeast Asia continues to be a testing ground for cybercrime innovations, Zscaler’s cloud-based solutions are essential for companies and governments looking to secure their digital operations. The company’s rapid growth, with a projected $5 billion in annual recurring revenue (ARR), is indicative of the rising demand for cloud security in regions where cyber-enabled fraud is on the rise. By safeguarding cloud-based operations and preventing unauthorized access, Zscaler provides the tools necessary to defend against the expanding threat landscape.

AI, Deepfakes, and the US Election

The UN’s report on cybercrime comes at a critical time, with the 2024 US Election fast approaching. The convergence of AI and deepfake technologies has amplified concerns about the role these tools could play in political manipulation and disinformation. Deepfakes, which can convincingly alter video and audio content, have the potential to influence public perception, disrupt democratic processes, and even alter election outcomes. This adds another layer of urgency to the need for robust cybersecurity defenses, not only in Southeast Asia but globally.

Cybersecurity experts have warned of the dangers AI-driven fraud and misinformation campaigns pose in the run-up to the US Election. As these technologies become more accessible to criminal networks, companies like SentinelOne and Zscaler will play a crucial role in detecting and neutralizing these threats before they cause widespread harm.

Cybersecurity as the New Frontier of Defence

In addition to the risks posed by cybercriminals, the geopolitical landscape has also shifted in alarming ways. With ongoing conflicts in Lebanon and Gaza, the potential for an Israeli attack on Iran, and heightened tensions globally, cybersecurity has emerged as the new frontier of defence. Critical infrastructure, national defence systems, and financial markets are all potential targets of state-sponsored cyberattacks. As a result, cybersecurity is no longer just about protecting businesses—it is a fundamental component of national defence.

SentinelOne and Zscaler’s roles in this new defence paradigm are critical. Their advanced, AI-driven solutions not only protect businesses but also secure the infrastructure that governments rely on to protect national interests. As cyber threats evolve alongside geopolitical instability, cybersecurity companies are becoming integral to the modern defence industry.

Investment Opportunity: The Growing Cybersecurity Sector

For investors, the rapid expansion of cybercrime presents both risks and opportunities. As governments and corporations recognise the need for enhanced cybersecurity, spending in this sector is projected to exceed $300 billion annually by 2026. Companies like SentinelOne and Zscaler are well-positioned to capture a significant share of this growing market, driven by their ability to provide cutting-edge solutions in an increasingly hostile digital landscape.

The investment case for these companies is further strengthened by the long-term nature of cyber threats. As AI continues to evolve and new technologies emerge, the demand for cybersecurity solutions will only increase. For investors, the cybersecurity sector offers both growth potential and the opportunity to play a part in defending against some of the most pressing global threats of our time.