Cyber Risk in 2026: From Technical Attacks to Systemic Failure
- Neil Hare-Brown
- Dec 22, 2025
- 5 min read
As organisations move toward 2026, cyber risk is no longer best understood as a purely technical problem.
The dominant threat is not malware alone, but the deliberate exploitation of human trust, organisational fragility, regulatory gaps, and economic incentives. Cybercrime has matured into a professionalised, adaptive industry that thrives precisely where governance, resilience, and accountability remain weakest.
The coming year will not be defined by a single new attack type, but by the convergence of several trends: the expansion of digital extortion beyond ransomware, the weaponisation of artificial intelligence to undermine business processes, the failure of government interventions to meaningfully reduce cybercrime, the accelerating exposure of OT and IoT environments, and a softening cyber-insurance market that may ultimately weaken resilience rather than strengthen it.
Together, these forces point toward a future in which cyber incidents increasingly resemble systemic business failures rather than isolated security breaches.
1. Digital Extortion Moves Beyond Ransomware
By 2026, ransomware will no longer be the defining feature of digital extortion - it will merely be one tool among many.
Threat actors are already shifting toward multi-vector extortion, combining data theft, harassment, regulatory pressure, reputational damage, and operational disruption. The objective is no longer simply to encrypt systems, but to apply sustained pressure across multiple fronts until payment becomes the least painful option.
Email will remain a critical attack vector in this evolution. Despite decades of awareness campaigns, email continues to offer the highest return on investment for attackers: low cost, high reach, and direct access to decision-makers. Business Email Compromise (BEC), invoice fraud, executive impersonation, and supplier-chain manipulation will increasingly blend into broader extortion campaigns, often without deploying malware at all.
In many cases, organisations will struggle to even categorise these events as “cyber incidents,” delaying escalation and weakening response. This ambiguity is not accidental but a deliberate strategy by threat actors to operate below traditional detection and reporting thresholds.
2. AI-Enabled Deception and the Undermining of Business Processes
The most significant shift in 2026 will not be technical sophistication, but deceptive realism.
Artificial intelligence is enabling threat actors to dramatically improve the quality, consistency, and contextual accuracy of social engineering attacks. Emails, voice calls, video messages, and even internal-looking documentation can now be generated at scale with near-perfect linguistic and cultural alignment.
Crucially, attackers are no longer targeting systems first and instead are targeting business processes.
Procure-to-pay workflows, HR onboarding, legal approvals, insurance claims, incident response decision-making, and executive communications are all being systematically probed and exploited. AI allows attackers to study an organisation’s public disclosures, supplier relationships, regulatory obligations, and even crisis communications, then tailor deception attacks that slot seamlessly into legitimate workflows.
This marks a shift from “hacking computers” to hacking organisational trust. Traditional security controls such as firewalls, endpoint detection, vulnerability scanning, offer limited protection against attacks that exploit authority, urgency, and procedural blind spots.
3. Why Government Initiatives Will Continue to Underperform
Despite increased rhetoric, funding, and international cooperation, government-led efforts to reduce cybercrime will continue to deliver limited real-world impact in 2026.
Two structural failures explain this persistent underperformance.
3.1 No Mandatory Baseline Resilience
In most jurisdictions, there is still no universal legal requirement for organisations to maintain baseline cyber resilience.
Where regulations exist, they are often sector-specific, inconsistently enforced, or focused on reporting rather than prevention.
Opposition to regulation continues to argue, without evidence, that mandated cyber resilience would stifle growth.
Critically, executive accountability remains weak. Penalties for catastrophic cyber negligence rarely extend beyond reputational damage or modest regulatory fines absorbed as operating costs. Without meaningful personal liability or professional consequences, there is little incentive for boards and executives to prioritise resilience over short-term financial performance.
Cybercrime flourishes where failure is cheap.
3.2 An Unregulated Cybersecurity Industry
Equally damaging is
the lack of regulation within the cybersecurity sector itself.
The market remains flooded with unqualified or inexperienced providers presenting themselves as Managed Service Providers (MSPs), incident responders, consultants, or “AI-driven” security vendors. Organisations attempting to improve their security posture are often misled, oversold, or actively harmed by poor advice and ineffective controls.
In effect, victims are “shot from both sides”: attacked by criminals and undermined by charlatans claiming to offer protection. Until minimum professional standards, licensing, and liability frameworks exist for cybersecurity providers, defensive efforts will remain fragmented and unreliable.
4. OT and IoT: The Next Expansion of the Attack Surface
Operational Technology (OT) and Internet of Things (IoT) environments will experience a marked increase in attacks through 2026.
This growth is not driven solely by malicious innovation, but by vendor-led connectivity strategies. Equipment manufacturers are increasingly pushing internet-connected features to lock customers into proprietary ecosystems, subscription models, and remote management platforms.
Security is often a secondary consideration.
Legacy OT systems that are designed for availability and safety rather than adversarial threat models, are being exposed to the internet without adequate segmentation, monitoring, or patching mechanisms. IoT devices continue to ship with weak authentication, poor update processes, and opaque supply chains.
The result is a rapidly expanding pool of high-impact, low-resilience targets spanning manufacturing, utilities, healthcare, transport, and smart infrastructure. Attacks in these environments will increasingly cause physical disruption, safety risks, and prolonged operational downtime rather than just data loss.
5. A Softening Cyber Insurance Market and Its Consequences
After several years of hardening prior to 2024 cyber-insurance markets have since experienced considerable softening.
While this may appear beneficial to buyers, the long-term consequences are more complex.
As competition increases, insurers are likely to respond with:
Reduced coverage for systemic risks,
Additional sub-limits for ransomware, extortion, and business interruption,
Tighter exclusions around “acts of war,” state-linked actors, and supply-chain failures.
Further pressure on insureds to become reliant on insurer-provided risk mitigation measures, that may impede their options to select future alternatives.
There is also a risk that cheaper premiums reduce the perceived urgency of investment in resilience.
If insurance is viewed as a substitute for preparedness rather than a backstop, organisations may find themselves underinsured when incidents inevitably exceed policy scope.
In 2026, the organisations most exposed will be those that rely on cyber insurance as a primary risk-management strategy rather than as part of a broader resilience framework.
Conclusion: Cyber Risk as a Governance Failure
In 2026, cyber risk will be less about unknown threats and more about known weaknesses left unaddressed.
Digital extortion will expand beyond ransomware. AI will supercharge deception. Government initiatives will continue to lag behind criminal innovation. OT and IoT exposure will grow faster than defensive capability. Cyber insurance will offer less certainty, not m
ore.
The common thread is not technology, but governance.
Organisations that treat cyber risk as a compliance exercise, a technical function, or an insurable nuisance will continue to suffer disproportionate harm. Those that recognise cyber resilience as a core business enabler, enforced through accountability, professional standards, and realistic threat modelling, will be best positioned to survive the next phase of the digital threat landscape.
In 2026, cybercrime will not be defeated by better tools alone. It will be shaped by the choices leaders make and the standards society chooses to enforce to meet the threat effectively.