Barclays’ Q1 2026 Business Prosperity Index reveals that as geopolitical risk intensifies, businesses are doubling down on technology, with rising AI investment now matched by a sharp increase in cybersecurity spending.
The survey found that 68% of UK business leaders expect to increase cybersecurity investment over the next 12 months, but almost half (46%) believe the adoption of new technologies is increasing their exposure to cybersecurity risks.
Almost seven in 10 businesses plan to increase cybersecurity investment
Resilience is now a key focus, with recent global turmoil putting cybersecurity at the forefront of many businesses’ priorities, with fewer than three in ten (29 per cent) confident in their ability to respond to a major cyber incident. In response, almost seven in ten (68 per cent) are planning to increase their cybersecurity investment over the next 12 months.
More than one third (36 per cent) of large firms have increased cybersecurity investment since the start of 2026, falling to 26 per cent of smaller businesses and 4 per cent of micro businesses. With additional finance, large firms say they would prioritise further cyber security (24 per cent) alongside AI investment (24 per cent).
The average amount decision makers have spent on cybersecurity to date in 2026 is £505,000. This rises significantly to £1.3million for large businesses and falls to £134,000 for small businesses and £15,000 for micros.
Balancing innovation and risk in adopting new technologies
As cybersecurity investment increases, businesses are seeking to find a balance between adoption and exposure. While 82 per cent are confident that their cybersecurity capabilities are keeping pace, almost half (46 per cent) are concerned that these technologies are increasing their exposure to cybersecurity risks.
Businesses are also increasingly aware of the operational and reputational fallout that major cyber incidents can cause. The biggest concerns among firms are damage to customer trust and confidence (28 per cent), operational disruption or downtime (27 per cent) and loss of revenue (26 per cent). Among large businesses, the leading concern is the loss of sensitive data or intellectual property (33 per cent)
Matt Hammerstein, CEO of Barclays UK Corporate Bank, said: “UK businesses are now operating in an environment where uncertainty has become the norm. Geopolitical instability and persistently high costs are feeding directly into cashflows, borrowing decisions and investment plans.
“What’s striking, however, is how businesses are responding. Rather than pulling back entirely, many are adapting to this new reality by tightening financial discipline, managing cash carefully and prioritising investment where it strengthens resilience, productivity and long-term competitiveness.”
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Over half of firms now use agentic AI
Alongside rising cyber investment, businesses are doubling down on AI and automation to improve efficiency and offset cost pressures.
More than half of businesses (52 per cent) believe AI and automation has improved their productivity, with employees now spending less time on administrative tasks (38 per cent), becoming faster at decision-making (34 per cent) and spending more time on higher value work (31 per cent). The way businesses are using AI has evolved too, with over half (61 per cent) now using agentic AI in their operations.
As adoption accelerates, businesses are embedding AI across a wider range of functions. Over the next two years, firms are planning to use AI to improve data analysis and forecasting (38 per cent), automate administrative tasks to improve employee productivity (31 per cent), enhance customer experience (29 per cent) and strengthen cybersecurity (29 per cent). Priorities remain varied, with more than a third (34 per cent) of small businesses planning to use AI to reduce operational costs, while nearly half (46 per cent) of micro businesses have no plans to use the technology at all.
While uptake is increasing, some concerns remain. Over a quarter (26 per cent) cited issues around the accuracy and reliability of AI outputs, while others are worried about data security and cybersecurity risks (24 per cent) and the cost of implementation (24 per cent).
Abdul Qureshi, Head of Barclays Business Banking said: “SMEs are navigating higher costs and ongoing uncertainty, which continues to weigh on day-to-day decisions. While larger firms push ahead with longer-term borrowing, many smaller businesses are focused on building cash buffers and closely managing their financial position. At the same time, AI is starting to present tangible opportunities for SMEs, particularly where it can help improve productivity and make everyday tasks more efficient.”