1 in 4 businesses hit by cyber attacks through their supply chain in the last year

Summary

New research from Databarracks reveals that 26% of UK businesses suffered a cyber incident originating from their supply chain in the last year. Despite high awareness of supplier risks, nearly half of organizations continue to work with suppliers despite known security concerns, often due to a lack of viable alternatives. The study highlights that organizations knowingly working with risky suppliers are over four times more likely to experience such incidents.

Full text

One in four UK businesses (26%) have suffered a cyber incident that originated in their supply chain over the last year, according to new research from business continuity and disaster recovery specialist Databarracks. The finding is particularly striking given that organisations are highly aware of the risk they face: nearly half (48%) admit they have continued working with suppliers despite known resilience or security concerns. The figures come from the Data Health Check 2026, Databarracks’ annual survey of 500 UK IT decision-makers, which has tracked IT resilience since 2008. This year’s report paints a picture of organisations that recognise the danger posed by their supply chains, but frequently feel unable to act on that knowledge. In many cases, the research suggests, businesses simply lack viable alternatives. More than a quarter of respondents (26%) identified “dependence on suppliers” as a main barrier to improving their organisation’s resilience. Awareness without action The Data Health Check found that supplier assessment is now standard practice for most organisations. Almost nine in ten businesses (89%) assess supplier resilience at the point of onboarding, and the majority (61%) go further by conducting assessments annually, quarterly, or continuously. Despite this due diligence, the risk clearly persists once a supplier relationship is underway. “Supply chain vulnerabilities” was named as one of the top three IT resilience challenges organisations expect to face over the next five years, cited by 23% of respondents – behind only AI-driven cyber threats (46%) and ransomware attacks (26%). The data also shows a clear link between known risk and real-world impact. Organisations that knowingly continued working with risky suppliers were more than four times as likely to experience a supplier-originated cyber incident: 43% of those organisations went on to suffer an incident, compared with just 10% of organisations that had not knowingly worked with risky suppliers. “Treat your critical suppliers like you would your own business” Commenting on the findings, Chris Butler, Resilience Director at Databarracks, said that supply chain resilience remains one of the most persistent weaknesses in UK organisations’ defences. “This year’s findings indicate that supply chain resilience remains a critical pain point for many businesses, which the majority are aware of and which continues to be exploited by attackers. When something goes wrong at a key supplier, the cascade effects can be profound for businesses throughout the chain.” “Despite good intentions around assessing supplier resilience, most companies don’t fully understand the depth of complexity in their supply chains. Often they’ll know who their core suppliers are, but beyond that, visibility drops away.” “The traditional approach to assessment has long been tick-box based, with compliance questionnaires growing longer every year. This approach creates a false sense of assurance rather than real resilience.” Butler argued that genuine improvement requires businesses to move beyond paper-based assurance and to take direct ownership of the risk that suppliers pose to their operations. “To truly manage your supply chain continuity, it’s vital to actually get visibility of the situation. Business leaders need to treat supplier resilience as part of their own resilience, not somebody else’s problem. It’s a bit of a cliché but for good reason: you really need to treat your critical suppliers like you would your own business.” He also urged organisations to take a more collaborative approach where smaller or less mature suppliers cannot be easily replaced. “Where there isn’t a viable alternative and your existing suppliers don’t have in-house business continuity skills, offer to help. Include your suppliers in your business continuity exercises and give them the chance to rehearse with you. It’s important to practice the response to disruption together rather than in isolation. Doing this will benefit you in the long run.” Part of a wider resilience picture The supply chain findings sit within a broader Data Health Check 2026 report that shows organisations bracing for a harsher resilience environment. The study found that 65% of organisations now believe a serious cyber attack could threaten their survival, while cyber remains the leading cause of IT downtime for the fourth year running, cited by 30% of organisations as their biggest cause of outages. The report also found reasons for optimism. Business continuity planning has reached a new high, with 90% of organisations now holding a plan and four in five of those kept up to date. Ransomware resilience is also improving: although one in four organisations (25%) experienced a ransomware attack in the last 12 months, only 18% of those affected paid the ransom, while 59% recovered from backups instead. Databarracks said the overall findings point to “integrating IT and business resilience” as the most-cited priority for organisations in 2026, reflecting a growing recognition that modern incidents – including those originating in the supply chain – rarely respect the boundaries between cyber security, IT operations, business continuity and executive decision-making.

Entities