UK and Irish MSPs Shift to Compliance as SMBs Prioritize Costs

Managed service providers across the UK and Ireland are increasing compliance services after the CyberSmart MSP Survey 2026 polled 350 MSPs in the region. The report found 46% of SMB customers now rank inflation and rising costs above security concerns, and 61% expect providers to help meet regulatory requirements.

Respondents reported continued cyber incidents: 74% reported at least one breach in the past 12 months, 54% experienced two or more incidents, and 32% reported three or more. Fifty-nine percent of MSPs said their customers face greater cyber risk than a year ago.

AI-driven threats were the top security concern for MSPs, with 49% naming AI as their primary channel concern for the second consecutive year. Inflation and rising costs were cited by 38% of respondents, up from fifth place previously. Nearly half of MSPs said customers now view inflation and spiraling expenses as a larger immediate threat than ransomware and malware (41%), emerging AI threats (37%), and supply chain risks (25%).

The survey reported a rise in MSP investment in compliance and regulatory work. MSP spending on compliance increased from 64% to 72% year over year. Many providers are offering managed compliance services alongside cybersecurity and infrastructure work, and customers expect help maintaining standards such as Cyber Essentials.

MSPs listed planned investments for the next one to three years: 51% plan more staff training, 46% will expand continuous monitoring capabilities, and 44% will increase proactive risk management. Seventy percent of MSPs reported increased customer oversight in 2026, down from 77% the previous year.

Jamie Akhtar, CEO and co-founder of CyberSmart, commented, “Cyber risk and economic pressure are now inseparable. MSPs can no longer sell cybersecurity in isolation when rising costs dominate customer priorities. The real challenge has moved beyond the tech stack into liability, compliance and accountability.” He added, “For SMEs, the key is embedding security into day-to-day operations and working with trusted partners to maintain resilience without adding unnecessary complexity or cost.”

The survey results document how customer cost concerns and regulatory expectations coincide with a high level of attacks reported across the channel.