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The emerging cyber threats most likely to define 2026 and what they mean in practical terms for teams that don’t have a full-time security department.
Small businesses and local governments enter 2026 in the same position they’ve been in for years: limited staff, limited budgets, and an outsized target on their backs. What’s different now is speed and scale. Attackers are using automation and AI to run more campaigns at once, tailor messages to specific people, and move from initial access to impact faster than many small organizations can respond.
1) Emerging Cyber Threats > AI-powered social engineering becomes “good enough” to fool almost anyone
Phishing has always worked because it exploits human behavior. In 2026, it will work better because it exploits human trust with realism at scale. Security leaders are already warning that AI will enable hyper-personalized scams, deepfakes, and more effective business email compromise (BEC) and extortion tactics.
Microsoft’s threat reporting points to a measurable effectiveness gap: AI-driven phishing can outperform traditional approaches, and automation makes highly targeted phishing dramatically easier to scale.
What this emerging cyber threats looks like for SMBs and city/county offices:
- A “vendor” emails updated payment instructions written in perfect tone and formatting.
- A staff member receives a voicemail that sounds like the mayor/county judge or CFO requesting an urgent wire transfer.
- A fake “IT helpdesk” message hits Teams/Slack with a link to “re-verify your login.”
Why it’s emerging: the cost of high-quality impersonation is falling, while the payoff (stolen funds, credentials, or access) remains high.
2) Emerging Cyber Threats > Ransomware shifts further into extortion, disruption, and “hybrid” operations
Ransomware is not going away in 2026; it’s getting more adaptive. Verizon’s 2025 DBIR reporting shows ransomware is disproportionately present in SMB breaches (an “in the majority” problem, not a rare event).
At the same time, extensive threat reports describe ransomware as increasingly “hybrid,” mixing intrusion, theft, and multi-path extortion rather than only encrypting files.
CISA’s #StopRansomware advisories also illustrate how ransomware groups evolve tradecraft and tooling over time (including recompiled binaries, changing indicators, and updated tactics).
What this looks like in 2026:
- Attackers steal data first, then threaten to publicly release it (sometimes without encrypting anything).
- They target backup systems and cloud consoles to prevent recovery.
- They create operational disruption: dispatch, permitting, payroll, water billing, and court scheduling services, where downtime becomes leverage.
3) Identity attacks and SaaS compromise replace “breaking into the network.”
Many organizations are now “cloud-first” without meaning to be: Microsoft 365, Google Workspace, QuickBooks, payroll portals, public-safety apps, permitting software, and dozens of SaaS tools. That makes credentials and sessions the real perimeter.
When attackers get a mailbox or admin account, they can:
- Create forwarding rules to intercept invoices and approvals quietly.
- Reset passwords elsewhere (because email is the recovery channel).
- Abuse OAuth/app permissions to maintain access even after password resets.
This is why BEC remains so profitable and why AI-assisted impersonation makes it more dangerous in 2026.
4) Emerging Cyber Threats > QR-code and mobile-first scams hit frontline staff where policy is weakest
QR phishing (“quishing”), smishing, and other mobile-driven lures are growing in popularity because they bypass many desktop security controls and land on the device people impulsively use. In 2025, major scam trends included QR-based fraud and mobile lures that push users to credential-harvesting sites.
For local government, this matters because frontline roles, such as clerks, inspectors, parks staff, utilities staff, and public works staff, often operate on phones and tablets with less monitoring and fewer controls than office workstations.
5) Third-party and “trusted vendor” compromise becomes the fastest route to victims
Attackers will continue to aim for the easiest entry point. If a small city has a firm password policy but a small IT vendor or managed service provider (MSP) is underprotected, the MSP becomes the doorway. The same is true for copier vendors, HVAC monitoring, web developers, and niche software providers.
In 2026, the practical risk is not just “supply chain” in the Fortune 500 sense—it’s small, local vendors with privileged access to multiple clients.
6) Operational technology and “smart” infrastructure expand the attack surface
Local governments increasingly rely on internet-connected systems: building controls, traffic-adjacent devices, cameras, water/wastewater monitoring, and facility access systems. These environments can be challenging to patch, rarely monitored like office IT, and often managed by vendors.
Even when attackers don’t “hack the plant,” they can disrupt the business side: billing, SCADA-adjacent workstations, engineering files, or remote access tools used for maintenance. The result is still a service interruption and public pressure.
What to do now (practical steps that reduce 2026 risk)
If you do nothing else before 2026 ramps up, do these five:
- Lock down identity: enforce MFA everywhere (prefer phishing-resistant methods where possible), block legacy authentication, and require strong admin controls (separate admin accounts, conditional access, least privilege).
- Harden email and payments: require out-of-band verification for all banking changes and wire requests; add “two-person rule” approvals for payments above a threshold.
- Backups that actually work: immutable/offline backups, tested restores, and restricted access to backup consoles.
- Reduce blast radius: segment key systems, remove local admin rights, and limit vendor remote access to specific times and systems.
- Train for the new reality: run short, scenario-based drills on deepfake/voice scams, invoice fraud, QR phishing, and “IT chat” impersonation. CISA specifically emphasizes practical planning and readiness for small organizations facing ransomware and related incidents.
In 2026, the most significant shift is that attackers will be more convincing, more automated, and more focused on identity, extortion, and business processes—not just “malware.” For small businesses and local governments, the goal isn’t perfection. It’s resilience: making attacks more challenging to pull off, limiting the damage when something gets through, and restoring services quickly when it matters most.
At Commonwealth Sentinel, we stay focused on cyber security so you can focus on other things. Contact us today or sign up for a free consultation.