Key takeaways
Supply chains face growing cyber fraud risks
Criminals exploit weak links to access sensitive data
Robust due diligence is critical for partners
Assess security practices before onboarding suppliers
Continuous monitoring strengthens resilience and trust
Ongoing checks help prevent breaches and financial loss
The invisible threat: cyber fraud in your supply chain
As part of October’s Cyber Security Awareness month, we look at issues arising from cyber fraud in supply chains.
In today’s globally connected economy, no business operates in isolation. From payment processors and logistics providers to IT vendors and customer platforms, modern supply chains are vast, complex, and digitally intertwined.
While this connectivity drives efficiency and innovation, it also opens the door to cybercriminals. Cyber fraud is no longer a fringe threat – it’s a mainstream business risk, irrespective of the size of a business’s operations. In fact, the UK’s National Cyber Security Centre responded to 204 nationally significant cyber incidents in the year to September 2025, which represented a 130% increase from the previous year.
The rise of cyber fraud: what’s driving it?
Cyber incidents are rising sharply, driven by:
Increased digital dependency across sectors
Post-pandemic digital habits that outpaced security upgrades
Sophisticated threat actors, including state-sponsored groups
Human error and poor cyber hygiene, which is still the leading cause of breaches
Phishing remains the most common attack vector, affecting 85% of UK businesses that experienced a cyber incident. Meanwhile, ransomware attacks have doubled year-on-year, and invoice fraud continues to cost UK businesses millions annually.
Supply chains: the new front line?
Cybercriminals no longer need to breach your systems directly – they can exploit the weakest link in your supply chain. A compromised supplier can give attackers access to your data, systems, or funds. The UK Government’s 2025 Cyber Security Breaches Survey found that fewer than 50% of large organisations assess the cyber risks posed by their suppliers. This is not without consequence:
Invoice redirection fraud and unauthorised fund transfers can ripple across multiple organisations.
Credential theft from one vendor can lead to widespread compromise.
For law firms and regulated entities, breaches can trigger regulatory investigations, client claims, and reputational damage.
Due diligence: a necessity to combat cyber fraud
Supply chain due diligence is now a necessity in order to mitigate the risk of cyber-attacks (and their consequences) on your business. It is also a legal requirement under the UK GDPR and Data Protection Act 2018 when personal data is involved.
Key ways in which businesses can carry out an appropriate level of due diligence are as follows:
Mapping your supply chain: Know who your suppliers are, what systems they access, and what data they handle.
Assessing cyber maturity: Consider whether your suppliers use multi-factor authentication – this is a must-have in order to minimise the threat of cyber incidents. It may be prudent to ask your suppliers whether they conduct regular audits and penetration testing.
Embedding security in contracts: Include clauses on minimum security standards, incident reporting timelines, and data deletion on termination. Be clear on what the consequences will be if the minimum security standards are breached.
Training and awareness: Your staff need to be very aware of the risks of cyber fraud and how cyber criminals carry out their activities. However, you should also consider extending fraud awareness training to your suppliers, especially those handling sensitive data or payments.
Testing and response
An effective cyber incident response plan must include fraud-specific scenarios. Key considerations in that respect are as follows:
If a supplier’s email is compromised, how will you verify payment instructions?
If customer data is stolen, who notifies affected individuals?
How quickly can you detect and contain a breach across integrated systems?
Regular tabletop exercises and simulated fraud attempts can expose weaknesses and improve coordination between finance, IT, and third parties.
What next?
Cyber fraud thrives on trust – it exploits the points where one organisation relies on another. Your defences are only as strong as your weakest link in your supply chain. By mapping risks, carrying our due diligence and embedded protections into contracts, you can look to mitigate the risk of cyber attacks on your business and the consequences that can follow.
In the event that things do go wrong our experienced team of cyber lawyers can assist with recovering lost payments.
