Australian firms hit by cyber incidents as AI threats rise

Cisco research shows that 93% of Australian organisations suffered a material cyber incident in the past year. It also found that 63% of security practitioners see internal organisational friction as a bigger obstacle than technology.

Most Australian enterprises have increased cyber spending, with 89% raising budgets over the past two years. Even so, 45% said incident levels either stayed the same or increased: 33% saw no change and 12% reported a rise.

Cisco's Defence Index gave Australia a score of 62 out of 100, placing it in what the company described as a reactive tier. That was slightly below the global average of 64.

Only 5% of Australian organisations qualified as what Cisco calls "Relentless Defenders", compared with 8% globally. In the study, that group is defined as organisations with broad and consistent security coverage, faster response times, and fewer internal bottlenecks.

Internal delays

The research identifies management processes and fragmented working practices as a central problem for security teams. Ownership issues, approval delays, and data silos across IT, procurement, and executive leadership were limiting how quickly organisations could respond to threats.

Less than half of respondents in Australia, 46%, said security, networking, and IT teams operated as one team with shared visibility and tools. Another 40% said the metrics they track are too technical to persuade executives, while 42% said they struggle to translate business metrics into information that can influence decision-making.

A further 30% said they had no consistent way to measure security performance. At the operational level, 40% said they spend more time collecting and correlating data across systems than addressing threats, while 42% said critical insights are missed because data sits out of reach.

The findings suggest that higher spending alone is not producing better outcomes. Among organisations that increased security spending, the top-performing group was nearly twice as likely to report a fall in incidents, with 71% doing so compared with 39% of others.

AI pressure

The report says artificial intelligence is reshaping the threat landscape and increasing pressure on defenders to act more quickly. More than 37% of the material incidents reported by Australian organisations involved an AI-enhanced attack.

At the same time, 88% of Australian practitioners said they had seen detection and response gains of at least 25% from AI, while 35% said it was significantly reducing operational burden. Yet only 39% of organisations surveyed said they had extensively deployed AI-powered security tools.

AI use was highest in network security and lowest in security operations and investigation, areas where it could directly reduce pressure on teams. The study also found that 40% had extensively deployed AI agents in security operations, but confidence remained mixed: only 62% said they were very confident they could detect and respond to a compromised AI agent.

Concerns over data exposure, compromised systems, and third-party handling were cited as key reasons for slower adoption. The report argues that these issues become harder to manage when organisations lack clear decision rights and shared data.

Top performers

The highest-scoring organisations stood out less for spending levels than for internal coordination and governance. Among that group, 83% said they operate as a single coordinated security team with shared visibility and tools across security, network, and infrastructure, compared with 37% of other respondents.

The same group also reported stronger controls over AI and non-human identities. Cisco found that 86% of these organisations apply consistent controls to AI agents and non-human identities, compared with 37% of others, while 77% said they were very confident they could detect and respond to a compromised AI agent, against 51% elsewhere.

The research also suggests that these organisations are seeing clearer gains from AI in day-to-day operations. One quarter said AI had improved threat detection speed by more than 100%, compared with 7% of other respondents.

Commenting on the findings, Carl Solder, Chief Technology Officer, Australia and New Zealand, Cisco, said: "AI adoption in the network was inevitable because human reaction time couldn't keep pace with packet-level threats years ago. The network became machine-speed by necessity. Security operations are now hitting that exact same inflection point. The organisations pulling ahead aren't treating AI as a separate chatbot in the SOC; they are treating the network fabric as the sensor and enforcement engine for the entire security stack."