Rising Email Fraud Threatens SMEs Amid Cybersecurity Gaps

• •Email fraud accounts for 55% of SME cyber claims in Australia and New Zealand.
• •Phishing incidents reported by Microsoft tripled in 2026, highlighting increased targeting of SMEs.
• •Only 3.7% of SMEs have cyber insurance, despite rising attack costs and risks.

In 2026, email fraud has become the leading cause of cyber claims among small and medium-sized enterprises (SMEs), with business email compromise (BEC) accounting for 55% of claims in Australia and New Zealand. Microsoft reported that phishing incidents tripled, representing 23% of initial access in their incident response cases. SMEs are often perceived as too small to be targeted, yet 25% reported being affected by cybercrime in the past year. The average cost of BEC attacks has risen by 22% in 2026, and many SMEs lack adequate cyber insurance, with only 3.7% having coverage. Financial constraints hinder their ability to invest in cybersecurity measures, making them vulnerable to sophisticated attacks. In Malaysia, SMEs are identified as the weakest link in cybersecurity, with 62% of corporate intrusions originating from third-party suppliers. Government initiatives are suggested to subsidize cybersecurity costs for SMEs.