Artificial intelligence (AI) is changing how you run your business. It speeds up processes, helps you understand data, and gives you tools that once felt out of reach. But as AI grows, so do the cyber risks.
Many small businesses in the UK now face evolving threats that are smarter, faster, and harder to spot than ever before. That’s because AI tools can clone voices, write smarter phishing emails, break weak passwords, impersonate businesses, the list goes on.
So, if you’re already juggling operations with smaller budgets and fewer resources than larger enterprises, this concerning trend can feel impossible to tackle. But don’t panic. With the right mix of awareness, practical cyber protection, and the right cyber insurance, you can stay one step ahead.
Wondering how your business stands up to emerging AI cyber threats? Request your free cyber risk assessment today or call Glowsure on 01730 239387.
Can artificial intelligence increase cyber risks for small businesses?
Yes, AI can significantly increase cyber risks for small businesses, especially those without dedicated IT teams. Cyber criminals now use artificial intelligence tools, machine learning, and generative AI to make cyber attacks faster, more personal, and far more convincing.
These AI-powered solutions allow threat actors to scan the internet for weaknesses, automate hacking attempts, and mimic human intelligence in scarily accurate ways.
As a small business, you are especially vulnerable, because:
- You store sensitive data
- You rely heavily on digital systems and external software
- You may not have strong cyber security defence in place (or the budget to facilitate one)
- You might be more likely to trust emails, invoices, and online requests
- You don’t have the same access to protection as larger companies
- You might not have the right insurance in place if something does happen
Government research shows that around 43% of businesses have experienced some kind of cyber incident in the last year. And for many small businesses, such attacks can cause major financial loss, downtime, and damage to customer trust.
How AI creates new cyber threats for small business owners
AI is becoming part of everyday business life. Whether you’re using it to brainstorm ideas, organise your workload, or speed up admin, it’s hard to ignore how quickly it’s transforming the way small businesses work.
But while AI brings lots of benefits, it also opens up new opportunities for cyber criminals.
The trouble is, many of these risks aren’t obvious. They sit quietly in the background, learning how you and your team behave online and looking for the right moment to strike. That’s why understanding the changing threat landscape is so important.
Let’s take a closer look at how AI increases cyber risks for small businesses and what these risks actually look like in practice.
Behavioural-based intrusions
Threat actors can now use AI systems to study your online behaviour, such as:
- When you log in
- How you write emails
- What tools you use
- Who you communicate with
This “gathered data” helps them tailor attacks that you don’t see coming. AI models can also mimic your writing style, making phishing messages almost impossible to distinguish from the real thing.
Predictive hacking
AI technology allows cyber criminals to scan for weak spots and known vulnerabilities across thousands of UK businesses at lightning speed. It can predict passwords and likely security answers, making it faster and easier to find these vulnerable areas in your business.
If your software or website isn’t patched, AI tools can find gaps and launch attacks before you realise there’s a problem or have time to fix it. These types of attacks are also known as ‘zero-day exploits’.
Rapid vulnerability exploitation
Cyber criminals no longer need hours or days to break through your cyber security.
Using AI, they can test thousands of password variations instantly and attempt unauthorised access to your systems in seconds. If your business uses cloud software, online banking, or remote logins (and most businesses do), this type of attack is a real and growing threat.
AI-powered cyber attacks that tend to target small businesses
Unfortunately, small businesses are appealing targets to cyber criminals because they know you have critical data, yet less advanced technologies and security in place compared to larger organisations.
Here are the top three types of AI-powered cyber threats to watch out for:
1) Phishing attacks
Phishing emails used to be easy to spot – poor spelling, spammy email addresses, generic greetings. Not anymore. AI can write flawless emails, copy your tone, or impersonate suppliers. Some might even include accurate personal or financial information scraped from across the web, creating frighteningly believable messages.
And AI systems can send these emails at scale, making it even more likely that someone in your team will click a malicious link.
2) Deepfake voice and video fraud
Generative AI helps criminals clone voices or create realistic videos that appear to come from directors, suppliers, or business partners. As futuristic as this sounds, it’s becoming a real problem for businesses in many different sectors.
With deepfake scams, you might receive a voicemail that sounds exactly like your manager asking for a payment or password. They are not always easy to spot, so if you receive anything like this that seems a little ‘off’, it’s crucial you report it (even if you think it could be real).
3) Automated malware and ransomware
With the rise of artificial intelligence, cyber criminals have gained tools that enable them to deploy malware and ransomware in a far more automated, aggressive way. It means they can quietly gain access to your systems, adapt to your defences, and then strike with little warning.
Take what happened earlier in the year at M&S. The retailer was hit by a ransomware attack that knocked out major parts of its systems, leading to an estimated loss of around £300 million in profits.
Why does this matter for a small business like yours? Because if a large retailer with deep resources and advanced systems can be brought to a standstill, it shows just how serious the threat is.
One successful ransomware breach can:
- Stop operations dead in their tracks
- Freeze your cash flow
- Expose sensitive data
- Damage the trust your customers and suppliers place in you
- Lead to major financial and reputational fallout
How to protect your business from AI-powered cyber threats
AI and cyber security can feel incredibly overwhelming. We get it. But you don’t necessarily need to be a tech whiz or buy expensive systems to improve cyber security for your startup.
You’ve already taken a big step by reading this blog and learning about the significant risks AI presents. Plus, a few practical steps can make a huge difference.
We’ve put together a simple checklist for you to work through to start making AI cyber security your top priority.
Use cybersecurity tools
Start with the basics. The right tools can reduce risk before threats get anywhere near your business.
- Firewalls block unwanted traffic trying to sneak into your network.
- Endpoint protection keeps laptops, mobiles, and tablets safer.
- Email filtering spots suspicious messages before they reach your inbox.
- Threat intelligence tools alert you to new or emerging risks.
- Multi-factor authentication (MFA) adds an extra layer of security to logins.
Strengthen your passwords and authentication policies
Weak passwords make easy targets for AI-powered attacks. But making a few small tweaks can help.
- Encourage long, unique passwords for every account.
- Stop using the same passwords for different platforms.
- Turn on MFA (multi-factor authentication) to block most unauthorised access attempts.
- Store passwords securely using a trusted password manager.
Train staff on cybersecurity protocols
Remember, keeping your business safe is a team effort!
- Teach staff how to recognise phishing emails and fake login pages.
- Have a clear process for assessing unexpected requests for payments or information.
- Run regular training sessions.
- Make it easy for employees to ask questions or report something suspicious.
- Expand or upskill your team to include a preventitive and responsive IT department.
Keep software updated
Keeping your software up to date makes it more robust against cyber hackers.
- Make sure devices and apps can update automatically where possible.
- Regularly check your website plugins, accounting tools, and CRM systems.
- Delete old software you no longer use.
- Update routers and network devices too, not just computers.
Conduct regular cyber risk assessments
A quick check-in now and then can highlight issues before they grow into bigger problems.
- Review who has access to what information.
- Look for weak spots like old passwords, unused accounts, or outdated hardware.
- Test your backup process to make sure it actually works.
- Ask your IT support or provider to run a yearly detailed assessment.
Get Cyber & Data Risk Insurance
Make sure you’re protected in the worst-case scenario.
Cyber and Data Risk Insurance can help cover:
- Business interruption
- Data recovery
- Legal costs
- PR support and reputational damage
- Compensation claims
Protect your business today with Glowsure
Cyber threats may be getting smarter, but you don’t have to face them alone. With our support and a policy that’s built around your risks, you can stay protected and get back to doing what you love.
Call Glowsure today on 01730 239387 or visit our website to get your FREE insurance quote.
Still wondering if cyber insurance is worth it for your business? Read our blog about why cyber insurance is crucial for businesses to get the answers you’re looking for.
Frequently asked questions on the effect of AI on cybersecurity for businesses
Can AI be used to improve cyber security?
Absolutely! While AI is a huge part of the problem, many strong cyber security systems incorporate AI into their models to help combat it.
It can scan your systems for unusual behaviour, flag dodgy emails, and even shut down threats before you’ve had time to make a cup of tea.
Will poor cyber security impact my insurance claim?
It can, yes. Insurers expect you to take some sensible steps to protect your business. This includes things like updating software, using strong passwords, and training your team to spot suspicious emails.
If those basics aren’t in place, your insurer may question whether you’ve done enough to prevent the incident. If you’re ever unsure, we’re always happy to talk you through what “good enough” looks like.
Can’t my IT team just protect me against AI-powered cyber incidents?
While there’s no doubt your IT team works hard to protect your systems, in today’s world, it isn’t always enough.
Your IT team handles firewalls, antivirus, and monitoring, and they can respond quickly when cyber threats emerge, but it’s always good to have an added layer of protection should your team need it. That’s what cyber insurance is for!
Cyber insurance covers ransomware and cyber extortion, data breach response costs, legal and regulatory expenses, customer compensation claims, and business interruption losses.
It doesn’t replace your IT teams, but it helps them work even more efficiently to protect your business.
Are AI-powered attacks covered by Cyber & Data Risk Insurance?
Yes, they usually are. Modern cyber policies are designed to cover a range of attacks, including those powered by AI.
The important part is making sure your cover actually fits how your business works. That’s where we come in. We’ll explain exactly what’s included, what’s not, and help you choose the right level of policy that keeps you covered.
