AJ Thompson, CCO of the IT services company Northdoor plc, pictured, goes over IBM’s latest annual Cost of a Data Breach report 2026 which has found that the cost of a data breach has risen globally to $4.99 million, or a 12 percent increase year-on-year and a record high. Driven by higher detection rates, escalation and lost business the cost for businesses is now higher than ever.
The report, conducted by the Ponemon Institute on behalf of IBM is based on 602 organisations of various sizes across 16 countries and geographic regions and 17 industries.
UK continues to suffer
The UK has seen several high-profile attacks over the course of the last year. This is reflected in the fact that the average cost of data breach in the UK now stands at £3.13 million. Although this has come down year-on-year, the cost of a breach is still considerable with many companies suffering much larger losses. The breach that hit Jaguar Land Rover in 2025 reportedly cost the company around £1.9 billion.
The high-profile 2025 attacks on Jaguar Land Rover, M&S, Co-op and Harrods were not because of attackers hitting their targets directly. Instead, the attacks originated via the supply chain, where cyber criminals hit third parties with vulnerabilities within their systems to gain access to their primary targets. These supply chain attacks have been the growing threat to UK companies across the past twelve months. This is again reflected in the IBM findings where it reports that a supply chain breach was the costliest factor for UK companies, increasing the cost of a data breach by £241,620.
AI
Perhaps one of the least surprising stats from the report was the fact that there had been a 56 percent increase in AI-generated attacks over the course of the past year. And cyber criminals are not only using AI as a tool to gain access to systems. They are also increasingly targeting the AI models and applications that are now relied on by businesses. The average cost for AI model inversion attacks stands significantly higher than other attacks at an average of $6 million.
With AI related attacks on the rise and increasingly successful, companies must be looking for AI-driven defences to guard against such sophisticated attacks. The IBM reports that 92 percent of organisations that reported an AI-related breach lacked the AI access controls. In contrast those teams that extensively used AI and automation in defence saw considerable savings. Breach times were shortened by 65 days and saved, on average, $1.93 million. Encouragingly, there appears to be recognition across sectors that AI-driven defences are now critical. When asked whether they would increase their security spending after experiencing a breach, 64 percent said they would. Upon learning of the new threats from AI, this figure increased dramatically to 85 percent.
The changing face of ransomware
Over the last year we have seen a change in the way cyber criminals are utilising ransomware attacks. Traditional methods have seen criminals stealing data and encrypting it before demanding money for it to be returned unencrypted. However, in addition to this they are now weaponising reputation and public shaming tactics, not just holding data until a ransom is paid but actively threatening to use it. This new approach represents 41 percent of ransomware attacks according to the IBM report.
Amongst those organisations breached over the last year 39 percent were victims of ransomware. This is in line with an upward trend from 24 percent in 2023, an increase of 62.5 percent during this period.
Recovery rates
The nature of the cyber threat means that it is more likely that an organisation will be breached than not. Therefore, having processes in place that allow you to recover from a breach quickly are now crucial. The IBM report shows that of those companies suffered a cyber breach 42 percent were able to fully recover their data. This means of course that 58 percent could not get all of the data they lost back. The 42 percent is up considerably from 2025 though, when only 35 percent were able to fully recover.
However, speed is of the essence in these cases and in general terms it is still taking companies too long to recover from a breach. Only four percent of companies managed to be fully recovered in less than 50 days. For a majority (29 percent) it took between 101 and 125 days and for 19 percent it took more than 150 days (although this figure had come down from 26 percent in 2025).
The future threat of quantum
As quantum computing moves closer to a reality organisations across sectors are struggling to work out the risks and opportunities. Although relatively new, the threat of quantum is very real. Although quantum computing cannot break modern encryption at the needed scale yet, this possibility is not very far away. However, whilst the threat is not there yet, companies are at risk now with cyber criminals able to collect encrypted data to use quantum to decrypt later. The IBM report shows that only 26 percent of organisations having a post-quantum cryptography project in place. Most do not (69 percent) with five percent not sure whether there was anything in place.
Most organisations (61 percent) said that they lack the controls to monitor and secure cryptography and cryptographic objects such as keys, certificates and algorithms. This is a serious security as securing these assets will be essential to prevent future data breaches when cyber criminals are able to utilise quantum computing at its full potential.
Vertical sectors
The healthcare sector has the highest average total cost of a data breach at $6.64 millions. Although this is a huge amount it is down considerably from $7.42 million the previous year. The financial sector is next at $6.29 million (up from $5.56 million) and then industrial at $5.50 million (up from $5 million).
In the UK this is slightly different with the financial sector leading the way with the highest average cost of a data breach at £5.46 million. Next are ‘services’ at £4.23 million, closely followed by energy at £4.03 million. Energy is worrying with the huge impact any breach can have on critical frontline services.
How IT consultancies can help
It is clear from the report that the threat from cybercrime has never been so great for companies across sectors and of all sizes. Not only has the average cost of a data breach increased, but cyber criminals are also looking at utilising existing threats differently and bringing in new technology that could change the face of cyber.
In the face of this growing threat some are turning to consultancies to help carry some of the load. Plugging gaps within internal teams to ensure that there is the requisite expertise to counter these threats is where consultancies can provide real value. Cyber threats, whether direct or via the supply chain are going to become more numerous and sophisticated over the next twelve months. Organisations across all sectors must ensure that vulnerabilities are close, staff are trained and that new threats from AI and quantum are addressed.
