Executive summary
- Breach costs fell globally but reached a record in the US. IBM puts the global average cost of a breach at $4.44 million, the first decline in five years, and the US average at $10.22 million.[1]
- Exploited software has overtaken stolen passwords as the main way in. Vulnerability exploitation was the initial access vector in 31% of breaches in Verizon’s 2026 DBIR[2] and 32% of Mandiant’s 2025 intrusions.[4] Only 26% of critical known-exploited vulnerabilities were fully remediated in 2025.[3]
- Attackers now move in minutes. CrowdStrike measured average eCrime breakout time at 29 minutes in 2025, with the fastest at 27 seconds.[5] Mandiant found the handoff from access broker to follow-on group fell to 22 seconds.[4]
- AI systems are a new and poorly governed attack surface. 13% of organisations in IBM’s study reported breaches of AI models or applications, and 97% of those lacked AI access controls. High use of shadow AI added an average of $670,000 to breach costs.[1]
- Fraud has joined ransomware at the top of the agenda. Chief executives in the WEF survey rank cyber-enabled fraud as their top concern, and 73% of respondents said they or someone in their network was affected in 2025.[7] Ransomware still appeared in 48% of breaches.[2]
- Regulatory deadlines keep arriving through 2028. Cyber Resilience Act reporting duties have applied since 11 September 2026,[19] high-risk AI Act obligations moved to December 2027 and August 2028,[20] and four member states face court action over NIS2.[15]
Key findings
What leaders should do
- Map dependencies on critical third parties and test recovery from their failure.
- Treat identity as the primary control point.
- Rehearse incident reporting against regulatory deadlines.
In the full report
- How AI is changing the attack
- Breach costs and the economics of ransomware
- Identity is the main attack surface
- Securing AI systems
- AI in security operations and the skills gap
- Regulation: what applies and when
- Post-quantum cryptography
- What to do in 2027
- Sources
Methodology
We built this briefing from public, dated sources opened during research in October 2026: annual threat and cost studies from IBM, Verizon, Mandiant, CrowdStrike, Microsoft, ENISA, the World Economic Forum and ISC2, guidance from the UK NCSC and NIST, and official regulatory pages. Where we relied on a law firm or trade press summary rather than the primary document, the source list says so. Each study uses its own sample, period and definitions, so figures from different sources should not be added together. Where the sources disagree, we say so in the text.
Sources
- IBM Newsroom, "IBM Report: 13% Of Organizations Reported Breaches Of AI Models Or Applications, 97% Of Which Reported Lacking Proper AI Access Controls" (Cost of a Data Breach Report 2025), 30 July 2025
- Verizon Business, "2026 Data Breach Investigations Report" (report page), 19 May 2026
- SC Media, "Verizon DBIR 2026: Vulnerability exploits top initial access as patching coverage falls" (secondary report of the 2026 DBIR), 20 May 2026
- Google Cloud (Mandiant), "M-Trends 2026: Data, Insights, and Strategies From the Frontlines", 23 March 2026
- CrowdStrike, "2026 CrowdStrike Global Threat Report: AI Accelerates Adversaries and Reshapes the Attack Surface", 24 February 2026
- Microsoft On the Issues, "Extortion and ransomware drive over half of cyberattacks" (Microsoft Digital Defense Report 2025), 16 October 2025
- World Economic Forum with Accenture, "Global Cybersecurity Outlook 2026" (digest), 12 January 2026
- ENISA, "ETL 2025: EU consistently targeted by diverse yet convergent threat groups" (ENISA Threat Landscape 2025), 1 October 2025
- UK National Cyber Security Centre, "Impact of AI on cyber threat from now to 2027", 7 May 2025
- CNN, "British engineering giant Arup revealed as $25 million deepfake scam victim", 16 May 2024
- UK National Cyber Security Centre, "UK experiencing four 'nationally significant' cyber attacks every week" (Annual Review 2025), 14 October 2025
- UK National Cyber Security Centre, "Prompt injection is not SQL injection (it may be worse)", 8 December 2025
- OWASP GenAI Security Project, "OWASP Top 10 for LLM Applications 2025", 2025
- OWASP GenAI Security Project, "OWASP Top 10 for Agentic Applications for 2026", 9 December 2025
- European Commission, "Commission refers Ireland, Spain, France and the Netherlands to the Court of Justice for failing to transpose rules on cybersecurity" (NIS2), 8 July 2026
- Wavestone, "NIS 2: Where are European countries in transposing the directive?" (updated to 1 January 2026), January 2026
- EIOPA, "Digital Operational Resilience Act (DORA)", accessed October 2026
- European Commission, "Cyber Resilience Act" (policy page), accessed October 2026
- Hogan Lovells, "EU Cyber Resilience Act: vulnerability and incident reporting obligations now apply" (law firm analysis), 11 September 2026
- Lewis Silkin, "The Digital Omnibus on AI enters into force today" (law firm analysis), 27 July 2026
- US Securities and Exchange Commission, "SEC Adopts Rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure by Public Companies" (press release 2023-139), 26 July 2023
- Free Writings & Perspectives, "SIFMA and Other Industry Groups Petition SEC for Rescission of Cybersecurity Disclosure Requirement" (law firm blog), June 2025
- ComplianceHub, "SEC SolarWinds dismissal and cyber disclosure rules in 2026" (compliance tracker), 4 May 2026
- UK Parliament, "Cyber Security and Resilience (Network and Information Systems) Bill: Stages", accessed 9 October 2026
- Lewis Silkin, "Cyber Security and Resilience (Network and Information Systems) Bill introduced" (law firm analysis), 18 December 2025
- NIST, "NIST Releases First 3 Finalized Post-Quantum Encryption Standards", 13 August 2024
- NIST, "NIST IR 8547 (Initial Public Draft): Transition to Post-Quantum Cryptography Standards", 12 November 2024
- UK National Cyber Security Centre, "Timelines for migration to post-quantum cryptography", 20 March 2025
- Infosecurity Magazine, "Skills Shortages Trump Headcount as Critical Cyber Challenge" (report of the ISC2 2025 Cybersecurity Workforce Study), 4 December 2025

