MSPs unprepared to deal with financial impact of cyber attacks

When it comes to the finances of ransomware, many managed service providers (MSPs) are leaving themselves at risk of serious problems if the criminals come calling for cash.

The latest CyberSmart MSP survey indicated that under half (45%) of those managed service players it quizzed had a dedicated fund set aside to cover ransomware payments. Even lower levels (36%) had taken out cyber insurance. The rest were taking a more ad hoc approach, with 11% not budgeting for attacks or taking out insurance, leaving themselves completely exposed if a ransom demand came their way.

Although efforts to curtail ransomware appear to be having some success, with customers across the board more aware of the risks thanks to some of the recent high-profile attacks, including the one on M&S and Ingram Micro, the problem persists.

MSPs remain in the firing line because of their position serving multiple customers, gifting the criminals access to a richer vein of information if they can crack the channel player’s systems.

“With customers relying more on MSPs for cyber security, it is essential that MSPs are cyber secure and cyber confident themselves, which means tackling the evolving threat landscape head on,” said Jamie Akhtar, CEO and co-founder of CyberSmart.

He added that accepting ransoms as a cost of doing business was not the best way forward: “Organisations shouldn’t rely on ransomware payments; rather, they should partner with organisations that can help proactively secure them.”

Despite the financial risks of ransomware, it came second on the list of concerns for MSPs, with artificial intelligence (AI) the main worry for many channel organisations. The survey revealed that AI-driven security threats were what the channel was least equipped to deal with due to a lack of the tools to fend off attacks.

Customers are also struggling to deal with AI threats and are leaning on MSPs even more heavily to cover the skills gap. CyberSmart’s report found that 84% of respondents were already being expected by their customers to manage either their security infrastructure or the security and IT estate combined.

The CyberSmart findings follow in the wake of research shared by Barracuda last week, which also highlighted the concerns the channel and their customers were expressing around AI.

Barracuda’s MSP customer insight report 2025 indicated that 92% of those organisations quizzed were ready to pay more for integration and advanced services to help deal with the need for increased network protection in the age of AI, with many looking to work with MSPs on those issues.

“The findings highlight the important role MSPs play in protecting organisations that are grappling with both evolving cyber threats and expanding IT environments,” said Andrew Cocking, EMEA and APAC sales director for MSP channel at Barracuda

“This has considerable implications for MSPs’ own business models as they are now expected to help customers integrate complex security tools, deliver around-the-clock protection and evolve their security posture as they scale. The survey shows that companies understand and value this external support but need reassurance that their partner won’t leave them exposed. MSPs that can be transparent about their own security and expertise, and offer technical as well as strategic excellence, will be well-positioned for the future.”