Running a small business in 2024 wasn’t easy as rising costs, hiring struggles, and a squeeze on consumer spending compounding difficulties. However, the rise of AI and the increasing threat of cyber-attacks have complicated the already turbulent headwinds of navigating a small business.

Bionic, a provider of comparison services for SMEs, surveyed 500 UK-based SMEs to understand the impacts of cybersecurity threats and AI technologies are having on small firms across industries in 2025.

More than half of businesses have increased spending on their cybersecurity and protection in the past year, 45.5% only slightly, with 8% saying they increased investment significantly.

Still, nearly half (42.4%) have not increased investment in their cyber posture in the past year.

This is despite 80% of the businesses said they weren’t targeted by a cyber-attack in 2024.

“In contrast to our research, the UK government statistics show 50% of businesses reported some kind of cyber-attack in 2024, with the most common being basic phishing attacks,” Laura Court-Jones, small business editor for Bionic, said.

“This could indicate there is a lack of awareness around the types of cyberattacks small businesses could face. Something as simple as a malicious link in a phishing email could easily go missed by many. And with cyber-attacks becoming increasingly common, and SMEs as easy targets, business owners should educate themselves and their employees on what to look out for to keep their business safe.”

When it comes to sectors, the IT and communications industry said they increased their cybersecurity the most (10% significantly, 52% slightly).

Health and social care and the transport and logistics industries also reported high amounts of increased cybersecurity spending, the survey found.

Recommended reading

• Microsoft: AI Uptake by SMEs Could Be Worth £78Bn to the UK
• Majority of Scottish SMEs Expect AI to Boost Productivity
• St Andrews Research Finds AI Could Boost SME Productivity by 133%

What About AI?

When it comes to AI integration, 74% of SMEs said they would incorporate AI into their business function to some extent during 2025. Only about a fifth (19.2%) said they were “not at all likely” to incorporate AI.

SMEs did share a range of concerns when it came to integrating AI, however, with about a quarter (24.8%) saying they were worried about inaccuracy, over a fifth (22.8%) showing concerns about knowledge gaps in the workforce, and a fifth (19.8%) worried about a lack of regulation.

Others were worried about AI being too expensive (10.8%), not finding the space for AI in their business (8.8%), job replacement (8.6%), and damaging relationships with customers (4.4%).

“Privacy and security could also be an issue, as handling customer data through AI could increase the risk of breaches or misuse. Some business owners may fear that AI could reduce the personal touch that sets their business apart, especially in customer service,” Les Roberts, Senior Content Manager, Bionic

“There may even be a simple resistance to change – adopting new technologies can be intimidating, particularly if the current processes are working well enough. These factors combined can make small business owners hesitant to embrace AI despite its potential benefits.”