UK firms boost cyber & AI spending, Barclays survey

UK businesses are increasing spending on cybersecurity and artificial intelligence, with cyber, cloud, and AI accounting for 44% of planned technology budgets over the next year, according to Barclays' latest survey.

The findings suggest a shift in priorities as companies weigh efficiency gains from new tools against rising operational and security risks. Some 68% of UK business leaders expect to increase cybersecurity investment over the next 12 months, while 46% believe that adopting new technologies is increasing their exposure to cyber threats.

Confidence in cyber preparedness remains uneven. Fewer than three in 10 businesses (29%) said they were confident in their ability to respond to a major cyber incident, despite 82% saying their cybersecurity measures are keeping pace with technology adoption.

Spending patterns differ sharply by size. Average cybersecurity spending so far this year stands at £505,000, rising to £1.3 million for large businesses and falling to £134,000 for small businesses and £15,000 for micro businesses.

Large companies have also moved faster to raise cyber budgets. More than a third of large firms (36%) have increased cybersecurity investment since the start of the year, compared with 26% of smaller businesses and 4% of micro businesses.

Risk and response

Among businesses concerned about the impact of a serious cyber incident, the most common worry was damage to customer trust and confidence, cited by 28%. That was followed by operational disruption or downtime at 27% and revenue loss at 26%. Among large businesses, the leading concern was the loss of sensitive data or intellectual property, mentioned by 33%.

The survey suggests businesses are trying to balance investment in new digital tools with tighter risk controls. While many respondents said they were pressing ahead with AI and automation, concerns about reliability, data security and cost remain widespread.

More than half of businesses (52%) said AI and automation had improved productivity. Respondents reported spending less time on administrative tasks (38%), making decisions faster (34%), and spending more time on higher-value work (31%).

Use of agentic AI has also spread, with 61% of businesses now proactively using it in their operations, suggesting adoption has moved beyond limited trials in many organisations.

AI priorities

Planned AI use over the next two years spans a broad range of business functions. Data analysis and forecasting topped the list at 38%, followed by the automation of administrative work to improve employee productivity at 31%. Enhancing customer experience and strengthening cybersecurity were each cited by 29%.

Smaller companies showed a different set of priorities. More than a third of small businesses, or 34%, said they planned to use AI to reduce operational costs, while nearly half of micro businesses, or 46%, said they had no plans to use the technology.

Reservations about AI remain notable even as adoption grows. More than a quarter of respondents (26%) cited concerns about the accuracy and reliability of AI outputs. Data security, cybersecurity risks and implementation costs were each mentioned by 24%.

Matt Hammerstein, Chief Executive of Barclays UK Corporate Bank, linked the investment trend to a tougher trading environment for companies.

"UK businesses are now operating in an environment where uncertainty has become the norm. Geopolitical instability and persistently high costs are feeding directly into cash flows, borrowing decisions and investment plans," said Hammerstein.

"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," he added.

Barclays said the data also reflected differing pressures across the business landscape, with larger companies more willing to commit to longer-term borrowing while smaller companies focus on liquidity and day-to-day financial management.

"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," Abdul Qureshi, Head of Barclays Business Banking, said.

The survey was based on research among 1,000 senior business decision-makers across micro, small, medium and large UK businesses, alongside separate research among 500 business-to-business leaders. One of its clearest findings was that investment in cyber resilience is no longer treated separately from digital transformation but as part of the same spending decision, with cloud, cyber, and AI accounting for almost half of planned technology budgets.