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by Aaron Flack on Jan 29, 2025
Depending on the start of your financial year, most businesses should be well into their financial planning by now, with January 2025 rapidly ticking by. For many CEOs, Managing Directors, and Board Members of mid-size UK businesses, the question of how much to invest in cybersecurity and broader technology resilience is more pressing than ever. External pressures like rising costs of living, inflation in supplier pricing, and the growing sophistication of artificial intelligence (AI) threats are adding further complexity to these budget decisions.
Organisations that overlook the intricacies of cyber risk often find themselves in reactive mode: plugging holes after incidents occur rather than mitigating issues in advance. With AI-driven attacks increasing and regulatory pressures intensifying, the stakes go far beyond short-term downtime or the embarrassment of a breached email account.
Shareholder trust, customer loyalty, and the future of the business thrive on the power of strategic and balanced spending.
Making sense of the threats in 2025
The speed at which AI (Artificial Intelligence) has advanced has caught many businesses off guard. Cybercriminals are using machine learning algorithms to automate phishing, vulnerability scanning, and advanced social engineering tasks. It is no longer just a case of defending against poorly worded scam emails, as today's fraudulent messages can be indistinguishable from legitimate business correspondence. This escalation means that every part of an organisation's technology infrastructure needs scrutiny that might not have been necessary a few years ago.
Meanwhile, the cost of living crisis continues to ripple across the economy, causing many suppliers to adjust prices. IT services and cybersecurity tools are not exempt from this upward cost pressure.
Vendors are reshaping their product and service offerings, often bundling advanced security features or AI monitoring systems at a higher premium. Selecting the right combination of services requires diligence to avoid wasting the budget on unnecessary or redundant features.
Blog post: 9 cyber-security predictions for 2025
Guided by insights from the National Cyber Security Centre (NCSC) and our experiences here at Conosco, our experts are excited to share their predictions for 2025.
Looking beyond traditional IT: resilience and continuity
While cybersecurity typically revolves around firewalls, encryption, and endpoint protection, the broader picture should include Business Continuity and Disaster Recovery (BCDR). Merely stopping attackers is one half of the equation; the other is ensuring the business can stay operational or recover rapidly if something breaks through.
A robust BCDR strategy addresses more than hardware and networks. It involves reviewing critical business processes, personnel responsibilities, and supplier dependencies to maintain service levels during a crisis.
Investing in resilience also extends to supply chain security. As more companies rely on third-party vendors for cloud hosting, managed security services, and business-critical applications, one vulnerable partner can become the weak link that exposes your entire operation. When deciding how much to allocate to vetting and monitoring suppliers, consider the potential reputational fallout and contractual liabilities if a third-party breach impacts your organisation.
Aligning spend with shareholder and customer expectations
Budget decisions around cybersecurity and resilience are no longer purely technical or operational matters. Shareholders expect transparency on how the organisation manages risk and ensures operational stability.
Customers, too, want reassurance that their data is safe and that the business will remain reliable, even in turbulent circumstances. A well-communicated, adequately funded cyber strategy can bolster shareholder trust and customer loyalty.
Yet, some organisations overspend on shiny new security tools without taking a step back to consider their real-world threats and vulnerabilities. Others skimp on fundamental needs, such as security patching and training, because they see them as sunk costs with no visible return. A balanced approach hinges on an honest risk assessment, setting priorities that align with core business objectives, and anticipating how the threat landscape might evolve in the coming months.
Moulding the budget with a risk vs reward mindset
Striking the proper equilibrium between risk and reward demands a holistic view of technology investments. Simply throwing money at the problem is not wise, nor is neglecting it until the business suffers an incident. An effective strategy might look at the following elements:
- Business Process Mapping: Identify which processes are critical to day-to-day operations. If these processes rely heavily on IT systems, they deserve cybersecurity and resilience planning priority.
- Supplier Risk Assessments: Rate each vendor based on the sensitivity of the data or systems they handle. This will guide how extensively you vet and monitor them.
- Future-Proofing Initiatives: Factor in AI-based security monitoring or automation solutions that can adapt to evolving threats. This is particularly relevant in 2025 as the sophistication of attacks continues to climb.
- Cyber Insurance: Weigh a policy's premiums and coverage details that can offset some of the financial fallout from a significant breach. Although it might seem like an extra expense, the peace of mind it provides could outweigh the cost if an incident occurs.
This approach acknowledges that every pound spent has an opportunity cost. There may be times when it is worth investing in a premium solution, especially if it guards a core part of the business. More straightforward or more cost-effective measures might suffice in other instances, particularly for non-critical systems.
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IT and security live in the boardroom
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Preparing for rising costs and operational pressures
With the cost of living crisis driving up salaries, rent, and third-party fees, businesses must be ready for a world where everything is more expensive. Even routine expenses such as software licensing and user training might see incremental hikes. The key is to budget with a realistic view of these increases. Scrutinise contracts coming up for renewal and consider renegotiating terms or exploring alternatives if vendors are significantly increasing their prices. Being proactive now avoids the shock of unexpected bills hitting mid-year.
At the same time, do not forget the human factor in cybersecurity. No amount of cutting-edge technology can compensate for employees who click on malicious links or fail to follow basic data-handling protocols. Training remains one of the most effective investments in reducing risk, particularly as phishing attacks become more sophisticated. Factoring ongoing education and simulated drills into your budget fosters a security-aware culture.
Failing to scale the cyber budget in line with rising costs can expose a business dangerously. While the temptation to redirect funds towards salary demands or other pressing areas is strong, insufficient investment in security measures places critical systems and data at risk. Threat actors are increasingly sophisticated, especially with the aid of AI, and even minor oversights can lead to severe breaches, reputational damage, and financial loss. Over time, this underfunding also hinders staff training and the adoption of new tools, ultimately weakening the organisation's resilience against escalating threats.
Free checklist: Cybersecurity for CISO's
The ultimate security checklist: vital for all new CIOs, CISOs and IT Directors.
Actionable insights for the months ahead
Even if your budget for the next financial year is nearly finalised, there are still several steps you can take to refine your approach:
- Run a Comprehensive Risk Assessment
Review each department and its dependencies on IT systems, mapping out where the most significant vulnerabilities lie. This exercise often highlights areas you might have overlooked, such as dependencies on legacy systems or single points of failure. - Evaluate Your Business Continuity and Disaster Recovery Plans
Revisit BCDR documentation to ensure it reflects current priorities, systems, and personnel. Check whether your planned response times and recovery objectives are still relevant. A good BCDR plan aligns with real-world customer, shareholder, and regulator expectations. - Revisit Cyber Insurance Quotes
Insurance terms evolve in line with threat levels and market competition. If you have not reviewed cyber insurance policies recently, this might be the time to see if more competitive or comprehensive options exist. - Review Supplier Contracts and Security Postures
Do not assume long-standing partners are automatically secure. Ask vendors about their own BCDR strategies and AI-driven threat detection measures. Ensure your contracts allow for audits or independent assessments. - Consider Long-Term Scalability
While focusing on current challenges, keep an eye on growth opportunities. If the business is on a trajectory to expand, your cybersecurity and continuity planning should be flexible enough to accommodate additional users, new applications, and an evolving threat profile.
These actions can be embedded into your budget plans by reallocating resources or making minor adjustments to accommodate new realities. Balancing risk and reward is not about eradicating all risk; it is about applying funds and attention wisely to keep the business secure, resilient, and primed for growth.
Blog post: A guide to cyber insurance in 2025
The message for CEOs, Managing Directors, and Board Members is clear: the stakes are higher, and insurers are responding with stricter requirements.
Finishing thoughts
The months ahead will be marked by increasing financial pressure and an ever-evolving threat landscape driven by AI-based attacks. Balancing risk against reward means scrutinising every aspect of security, continuity, and insurance while monitoring shareholder confidence and customer satisfaction. There is no universal formula, but a thoughtful approach, backed by thorough risk assessment and ongoing review, can ensure your organisation invests in the right areas at the right time.
Securing your future is less about chasing the newest gadget and more about embedding resilience into every corner of the business. As you put the finishing touches on your budget, remember that well-considered decisions now will pay dividends when it matters most: if and when a crisis hits. By maintaining this pragmatic mindset, your organisation can strike the perfect balance between safeguarding continuity and enabling sustained growth in the face of ongoing challenges.
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