Railway Cybersecurity Market

The railway cybersecurity market is expected to reach USD 6.2 billion in value by 2023 and is projected to reach USD 10.6 billion by 2030, with a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030. The application of internet technology in railways, including smart cities, smart transportation, rail traffic management systems, CBTC, and PTC, has led to the need for cybersecurity. Advanced technologies such as PIS, smart ticketing, passenger infotainment, rail analytics, cloud and IoT services, freight information and analytics, and intelligent devices face cybersecurity threats. Additionally, the increasing complexity of cyberattacks and the emergence of advanced systems and solutions in the railway industry have made IoT more susceptible to cybersecurity threats. As a result, the deployment of railway cybersecurity solutions is expected to grow.

The rise in data breaches and leaks is driving the demand for railway cybersecurity products, solutions, and services. With the advancement of technology, automated and sophisticated cyberattacks are increasing. To combat these threats, railway operators worldwide are adopting cybersecurity solutions and services. For example, in May 2023, SNCF and its partners announced the development of an autonomous train prototype in France, with cybersecurity being a major concern from the start of the project. Alstom also invested USD 7 million in Cylus, an Israel-based cybersecurity company, in 2020 to provide top-notch cybersecurity solutions for the rail market.

The deployment of smart digitalized railway systems requires collaboration among various stakeholders, including telecom operators, infrastructure providers, service providers, manufacturers, public sectors, and user groups. Governments are adopting Public-Private Partnership (PPP) models to encourage private sector participation in smart, digital, and connected railway initiatives, which impacts the demand for railway cybersecurity projects.

Asia Pacific is expected to be the fastest-growing region in the railway cybersecurity market. Governments in the region are working closely with information technology and railway cybersecurity companies to widely deploy driverless train technology. China, in particular, launched the world's fastest driverless bullet train in 2020, equipped with various advanced systems that require cybersecurity solutions. The focus on high-speed rail programs in China and investments in digital rail infrastructure and equipment may further drive the demand for railway cybersecurity globally, especially for connected high-speed trains operating in different infrastructures and requiring sophisticated communication and management solutions.

Market Dynamics:
Driver: Government initiatives for smart railways
The evolution of smart cities due to increasing urbanization has prompted governments worldwide to undertake smart city initiatives, aiming to improve transportation infrastructure and enhance operational efficiency in public transportation services. For instance, the Government of India plans to develop 100 smart cities in the coming years, while Singapore is implementing digital technology to achieve its Smart Nation vision. These initiatives, driven by the recognition of transportation as a vital pillar of economic development, are expected to propel the growth of the railway cybersecurity market.

The deployment of smart railway systems requires collaboration among various stakeholders, including telecom operators, infrastructure providers, service providers, manufacturers, public sectors, and user groups. Governments are adopting Public-Private Partnership (PPP) models to involve private sector companies in the deployment and financing of transportation projects. These national-level initiatives are anticipated to drive the growth of the railway cybersecurity market in the forecast period.

Restraint: High development cost
The high installation cost is a significant restraint in the railway cybersecurity market. In countries like Brazil, South Africa, and India, the lack of efficient infrastructure hampers the implementation of various solutions and services. Land acquisitions for railway transportation projects involve high costs, government clearance, and public-private partnership agreements. As IoT is being adopted in rail solutions and requires extensive networks, the slow development of infrastructure leads to the sluggish adoption of advanced technologies and solutions, acting as a hindrance to railway cybersecurity adoption.

The initial cost of deploying cybersecurity solutions is high, requiring substantial investments for setting up field-level devices, replacing aging infrastructure, introducing advanced technologies (such as predictive maintenance, artificial intelligence, big data, and cloud computing) in urban rail, establishing transmission networks, and managing new and existing systems. High operational and maintenance costs post-deployment also pose concerns for railway authorities. Moreover, limited budgets for railways impede the deployment of advanced technologies and solutions by both governments and private players. Consequently, the high initial cost of deploying cybersecurity solutions is expected to impede the growth of the railway cybersecurity market in the coming years.

Opportunity: Increasing demand for cloud-based services
The demand for cloud-based services, analytics, and mobile internet technologies is on the rise due to their efficient IT management and reliable security environment. With the growing prevalence of big data applications, complexity is expected to increase alongside the expanding data pool, emerging technologies, and the need for cost optimization. These factors are anticipated to drive the growth of new analytics platforms and data storage.

As signaling systems become more centralized and IT-based, using regular computer and commercial off-the-shelf (COTS) components, they become susceptible to cyber threats. Therefore, deploying cloud-based services in railways becomes crucial. Cloud computing utilizes collected data and distributes it to one or more computer systems, reducing the risk of cyberattacks on critical and non-critical data. This would further stimulate the growth of the railway cybersecurity market.

Challenge: Lack of cybersecurity expertise and strategic planning
The shortage of skills among security professionals is a prevalent concern in major security companies. Security professionals need up-to-date knowledge, advanced analytics skills, expertise in forensic investigations, and cloud computing security to effectively combat cyberattacks. The increasing cybersecurity threats have created a shortage of relevant IT security skills and professionals. Railway cybersecurity providers and service operators must take additional steps to bridge this skills gap.

Railway companies should adopt proactive strategies, incorporating cyber-secured design and training staff to predict and monitor data closely for potential attacks. Lack of pre-planning hampers security operations and functionalities on a large scale. Proactive safety planning enables enterprises to select solutions equipped with functionalities like big data, machine learning, and AI. The lack of proactive safety planning poses a significant challenge in the railway cybersecurity market.

Passenger train segment holds a significant market share during the forecast period
During the forecast period, the market for railway cybersecurity is expected to be led by the passenger trains segment. Securing the passenger rail network is more complex compared to the freight segment due to its open infrastructure, multiple access points, and large user base. Recent cyberattacks on passenger railways in cities like London and New York have emphasized the importance of railway cybersecurity. Governments worldwide are encouraging the adoption of cybersecurity solutions for both passenger and freight railways. For instance, in April 2020, the US Government Accountability Office released a report assessing passenger railway cyberattacks in the US and Europe, along with guidelines to mitigate them. These government initiatives are anticipated to drive the growth of the railway cybersecurity market during the forecast period.

Asia Pacific is projected to be the fastest-growing market by 2030
The rapid urbanization and population growth in Asia Pacific are driving the development of rail networks, urban rail, and mainline infrastructure construction. Key players in the region include Hitachi Ltd., Huawei, Toshiba, and Tech Mahindra Ltd. The region encompasses potential markets such as China, India, Japan, and the Rest of Asia Pacific. China is expected to lead the market, followed by India, Japan, and the Rest of Asia Pacific in terms of market share and growth rate. The growth of infrastructure construction in the region will drive the railway cybersecurity market. Cybersecurity is crucial for railway management systems, which are vulnerable to data breaches. China and Japan possess highly sophisticated rail infrastructure in the region.

China, with its extensive rail network and ongoing improvements, has the largest high-speed rail network in the world, covering approximately 35,000 km as of 2020. The country is also aggressively expanding its urban transit network. India is also expected to emerge as a promising market for railway cybersecurity due to various projects related to urban transit and high-speed rail. In 2023, the European Investment Bank signed a finance contract worth USD 182 million with the Indian government for the Pune Metro Rail project in Maharashtra, aiming to provide urban mobility to a significant population, including the working class.

Key Market Players
The key players in the Railway Cybersecurity Market include Thales Group (France), Siemens AG (Germany), Alstom (France), Wabtec (US), and Nokia Networks (Finland). These companies offer comprehensive products for the railway cybersecurity industry, possess strong distribution networks, and heavily invest in research and development to innovate new products.

This research report categorizes the global railway cybersecurity market based on offering (solutions & services), security type, type, application, rail type and region
Market, by Offering
• Solutions
o Risk And Compliance Management
o Encryption
o Firewall,
o Antivirus/Antimalware
o Intrusion Detection System/Intrusion Prevention System
o Others
• Services
o Design And Implementation
o Risk And Threat Assessment
o Support And Maintenance
o Others

Market, by Security Type
• Application Security
• Network Security
• Data Protection
• Endpoint Security
• System Administration

Market, by Type
• Infrastructure
• On-board

Market, by Application
• Passenger Trains
• Freight Trains

Market, by Rail Type
• Conventional Passenger Trains
• Urban Transit
• High-Speed Rail

Market, by Region
• North America
• Europe
• Asia Pacific
• Middle East & Africa
• Latin America

Recent Developments
• In May 2023, Wabtec received a supply contract worth USD 15 million from Delhi-Meerut Regional Rapid Transport Systems (RRTS). The contract involves providing advanced technology brake systems, pantographs, roof disconnector switches, and fully integrated passenger information systems for the construction of coaches in this project.
• In May 2023, Siemens announced the acquisition of RailTerm, a rail service provider based in Canada. This acquisition will enable Siemens to expand its product portfolio in on-ground track and signaling, electrification, and communication systems.
• In March 2023, Wabtec announced the acquisition of Nordco, a North American supplier of maintenance-of-way equipment. Nordco's product range includes mobile railcar movers and ultrasonic rail flaw detection technologies. This acquisition aims to enhance Wabtec's product portfolio and global presence.
• In March 2023, Thales developed the DIVA (Distributed Intelligent Video Analytics) solution for passenger railways. This solution utilizes existing CCTV networks at stations and onboard trains to provide real-time information and passenger density analysis.
• In February 2020, Thales signed a supply contract with L&T Metro Rail Limited in Hyderabad, India, to provide advanced signaling and train control technology solutions. In January 2023, Nokia signed a supply contract with WESTbahn fleet in Austria, providing train-to-ground solutions to enhance the onboard passenger experience.
• In December 2020, Alstom and ASELSAN collaborated to establish a framework for cooperation in the field of ETCS Signaling Onboard. This collaboration aims to create a long-term partnership and leverage the expertise of both companies in rail systems.
• In September 2020, Thales secured a supply contract for Vancouver's Broadway Subway Project, supplying Communications Based Train Control (CBTC) systems. The trains in this project will be equipped with Thales's SelTrac solutions.