UK small businesses are facing greater AI security threats than ever — and are sadly woefully unprepapred

Recent research from ESET reveals that nearly half of UK small and medium-sized businesses (SMBs) have experienced a cybersecurity incident in the past year. The primary causes of these attacks include phishing, unpatched vulnerabilities, weak passwords, and insufficient monitoring. As cybercriminals increasingly utilize AI-powered tools, the threat landscape for UK SMBs is evolving, making these businesses more vulnerable to sophisticated attacks.

ESET's 2026 SMB Cyber Risk Report surveyed 500 UK SMBs, and the findings highlight significant concerns among these businesses. The top security concern among survey respondents was AI-powered malware. While phishing remains a leading cause of attacks, the report also identifies unpatched vulnerabilities, weak passwords, and a lack of monitoring as significant contributors to security breaches.

Experts warn that AI technology will pose a much bigger challenge for SMBs in the future. While AI will enable cybercriminals to accelerate their attacks, the fundamental tactics, such as phishing and exploiting software vulnerabilities, are likely to remain unchanged. According to Jake Moore, Global Cybersecurity Advisor at ESET, unless SMBs improve their security by addressing these basic issues, they remain vulnerable to data theft and financial losses.

Despite the growing threats, the report also shows that many SMBs are recognizing the need to enhance their cybersecurity measures. Over half of the surveyed businesses (55%) plan to increase their cybersecurity budgets within the next 12 months. Their top priorities for investment include employee training and awareness programs, as well as improving cloud security.

The impact of these cyberattacks cannot be understated, as UK SMBs contribute more than half of the private sector's turnover in the UK, equating to around £2.8 trillion. Although the situation appears daunting, the report suggests that proactive investment in cybersecurity can help mitigate risks and protect the financial well-being of these critical businesses.