AI Cyber Threats Are Changing SMEs’ Risk
Australian SMEs are discovering that cybercrime has evolved far beyond obvious phishing attempts.
Modern attacks leverage artificial intelligence (AI), creating sophisticated scams. They’re harder to detect and significantly more expensive to resolve.
According to the Australian Cyber Security Centre’s 2023-24 Annual Threat Report, over 87,400 cybercrime reports were submitted, representing one incident every six minutes.
Modern Threats Targeting SMEs
Artificial intelligence is transforming cybercrime through:
Deepfake videos
Sophisticated fake invoices
Voice cloning technology
Research shows deepfake fraud surged by 1,300% in 2024 globally, with synthetic voice attacks specifically targeting retail, banking, and insurance sectors rising by 475%, 149%, and 107% respectively.
Nearly one in four Australian businesses faced deepfake security incidents in the past year, with 56% of cyber claims in 2023 resulting from funds transfer fraud.
Voice cloning technology now costs as little as $100 to replicate anyone’s voice, making executive impersonation attacks increasingly accessible to criminals.
Australian regulators report cases where victims lost more than $10 million to celebrity deepfake investment scams. As well, three-quarters of businesses experience security incidents through compromised supply chain partners.
Small businesses face these threats through business email compromise, fraudulent supplier communications, and impersonated client requests targeting their specific vulnerabilities
Beyond Financial Losses
The impact extends well beyond IT disruptions.
Small businesses face the highest average financial impact, with losses averaging $49,600 per incident, representing an 8% increase from the previous year.
Recovery often takes months, with about two-thirds of Australian businesses unable to survive a major cyber incident.
The broader impact includes damaged reputation, operational disruption, and potential regulatory penalties under privacy legislation.
Modern Insurance for AI-Era Risks
Conventional cyber insurance policies may lack specific coverage for AI-generated threats like deepfakes and synthetic voice attacks. This coverage gap creates uncertainty about policy responses to AI-driven incidents.
The insurance sector is developing ‘affirmative AI’ coverage that consolidates cyber, liability, and technology risks into comprehensive protection packages. Check out this joint report from the CSIRO and the Insurance Council of Australia. The report outlines how AI can be used to tackle some of the insurance sector’s most urgent challenges and support customers.
For small businesses, this evolution ensures insurance protection aligns with the current threat landscape rather than outdated risk models.
Industry Investment Signals Urgency
While criminals adopt AI for attacks, security companies are rapidly expanding their defensive capabilities.
Accenture’s August 2025 acquisition of CyberCX for $650 million demonstrates the massive demand for AI-enhanced cybersecurity solutions in the Australian market. This investment trend indicates that cybersecurity has become essential business infrastructure rather than an optional expense.
Privacy Law Changes Ahead
Recent Privacy Act reforms require businesses to disclose automated decision-making processes by December 2026, including AI systems that could significantly affect individuals.
The Office of the Australian Information Commissioner has also released guidance emphasising 'privacy by design' for AI systems and requiring consent when sensitive information is used to train AI models.
Practical Protection Steps
SMEs can reduce their risks by combining prevention with updated insurance.
Key steps include:
Taking these steps reduces downtime, protects customer trust, and makes insurance claims more straightforward.
Why Expert Support Matters
Navigating cyber insurance options can be complex, especially with AI creating new blind spots. We can help you assess whether your policy addresses AI-driven threats, third-party system failures, and evolving regulations, so your business stays resilient, protected, and ready for growth.