News Every Day | 27 January 2025, 12:01

Cybersecurity Threats Hit Mid-Market Firms Where It Hurts: The Bottom Line

When it rains, it pours, especially for middle-market companies caught in the crosshairs of uncertainty.

Sandwiched between a competitive landscape full of startups with agility and large corporations with deep pockets, mid-market companies already have their hands full with operational considerations, such as fluctuating demand, supply chain disruptions and macroeconomic volatility.

To add insult to injury, the latest findings from PYMNTS Intelligence’s The 2025 Certainty Project revealed that mid-market firms are also disproportionately affected by cybersecurity threats, leading to financial losses, stalled innovation and a more pessimistic outlook.

Unlike large enterprises with robust budgets and dedicated teams, mid-market companies often operate with limited resources, making them attractive targets for cybercriminals. The convergence of operational uncertainty and cybersecurity threats creates a feedback loop. Uncertainty exacerbates vulnerability, and vulnerability deepens uncertainty.

This can result in a reactive rather than proactive approach to cybersecurity, leaving firms exposed.

How Mid-Market CFOs Are Rising to the Challenge

Historically, cybersecurity has been viewed as a cost center rather than a strategic investment. However, cyber threats can frequently cause more than just financial losses, and many breaches tend to ultimately lead to operational errors, delays and missed opportunities. The report found that firms lose more money to cybersecurity threats than they spend fighting them.

At the same time, the cost of uncertainty remains a considerable, yet often silent, tax on mid-market businesses. The report found that 38% of high uncertainty firms were more likely to experience lost revenue, compared to 27% for average firms. Meanwhile, 44% were more likely to experience missed opportunities, compared to 30% for average firms.

Among all respondents, 72% reported concerns over direct financial losses due to cybersecurity incidents. This figure increased to 88% for firms navigating heightened uncertainty.

Despite these challenges, a growing number of mid-market chief financial officers are taking a proactive stance on cybersecurity. These leaders are recognizing the strategic importance of safeguarding their organizations and embracing the shift from seeing cybersecurity as an IT issue to treating it as a business-critical function. As a result, they are implementing measures to mitigate risks and foster resilience.

The cybersecurity landscape has grown more complex and perilous. Sophisticated ransomware gangs, phishing schemes targeting supply chains, and zero-day vulnerabilities have become commonplace.

Struggling to balance budget constraints and digital innovation, high-uncertainty mid-market companies can find themselves facing a one-two punch of financial loss and stalled growth.

Against this backdrop, addressing cybersecurity isn’t just about mitigating risks; it’s about enabling the business to thrive in a digital-first world. The report found that in high-uncertainty environments, 81% of firms cited frequently having to delay or cancel any innovation or technology initiatives due to considerations related to cybersecurity risk in the last 12 months.

By avoiding necessary upgrades or delaying the adoption of advanced technologies like artificial intelligence and Internet of Things, mid-market firms risk falling behind their competitors.

According to the report, 31% of high-uncertainty firms expect cybersecurity risks to worsen, almost eight times the 4% rate reported by low-uncertainty firms. However, for a select few CFOs, including those who expect cybersecurity risk levels to improve in the next year, these challenges can be the catalyst for innovation, not capitulation.

For instance, businesses that invest in secure customer portals or encrypted payment systems can not only protect sensitive data but also enhance user experiences. Similarly, manufacturers adopting IoT can use secure networks to streamline operations and improve efficiency, gaining a competitive edge.

In a world where threats and opportunities are evolving rapidly, standing still is no longer an option. For mid-market businesses, the path forward lies in embracing cybersecurity as a catalyst for resilience and innovation rather than a roadblock. Only then can they thrive in the face of uncertainty.

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