Introduction: SMEs in the Defence Sector Are Under Attack
The defence industry is a high-value target for cybercriminals, state-sponsored hackers, and espionage groups. While large defence firms like BAE Systems, Lockheed Martin, and Boeing invest millions in cybersecurity, their smaller suppliers often lack the same level of protection.
Defence SMEs (small-to-medium-sized enterprises) are the weakest link in the supply chain. Attackers know this and exploit their vulnerabilities to gain access to classified data, weapons designs, and national security information.
🚨 60% of defence SMEs have experienced a cyber incident in the past two years.
🚨 80% of cyberattacks on the defence sector originate from vulnerabilities in the supply chain.
🚨 A single compromised SME can provide hackers with access to an entire defence network.
In this article, we’ll explore:
🔹 Why SMEs are a growing target in the defence sector
🔹 The most common cyber threats facing defence contractors
🔹 How SMEs can strengthen cybersecurity to meet MOD & government requirements
1️⃣ Why SMEs in Defence Are a Prime Cyber Target
🔹 1. They Hold Valuable Data with Weaker Security
📌 Large defence firms invest heavily in advanced security controls, threat detection, and SOC teams.
📌 SMEs often lack dedicated cybersecurity teams and rely on basic security measures.
📌 Hackers target smaller firms to gain access to confidential defence data and classified contracts.
💡 Example: In 2018, a UK-based defence SME was targeted by hackers using a phishing campaign to steal export-controlled technology designs related to military drones.
🔹 2. They Act as Gateways to Larger Defence Companies
📌 Many SMEs work as Tier 2 & Tier 3 suppliers, providing components, software, or logistics to large defence contractors.
📌 Attackers breach smaller suppliers to infiltrate the larger organisations they serve (a supply chain attack).
📌 Once inside, they can move laterally to steal intellectual property, access military projects, or disrupt operations.
💡 Example: The 2013 Chinese cyber-attack on a US defence contractor started with a breach at a small subcontractor supplying parts for fighter jets.
🔹 3. They Are Targeted by State-Sponsored Espionage Groups
📌 Countries like China, Russia, North Korea, and Iran use cyber tactics to steal defence technology.
📌 State-backed hacking groups actively target SMEs working with the UK Ministry of Defence (MOD).
📌 SMEs often don’t have the threat intelligence capabilities to detect or defend against these advanced persistent threats (APTs).
💡 Example: The APT10 hacking group (linked to China) used phishing and malware attacks to steal classified submarine blueprints from a UK defence contractor.
2️⃣ The Most Common Cyber Threats Facing Defence SMEs
🔹 1. Phishing & Business Email Compromise (BEC)
📌 Attackers send fraudulent emails impersonating MOD officials, suppliers, or defence contractors.
📌 A single employee clicking a malicious link can expose the entire network.
📌 Fake invoices and fraudulent payment requests trick finance teams into wiring money to cybercriminals.
💡 Example: A defence SME lost £250,000 after receiving a fake invoice from a “trusted” supplier’s compromised email account.
🔹 2. Ransomware & Data Exfiltration
📌 Cybercriminals use ransomware to encrypt critical defence files, demanding millions in ransom payments.
📌 Defence SMEs may store sensitive blueprints, technical schematics, and classified communications, making them high-value ransomware targets.
📌 Attackers steal classified data before deploying ransomware, leading to intellectual property theft.
💡 Example: A UK defence software company had to shut down operations for a week after a ransomware attack encrypted all of its classified project files.
🔹 3. Supply Chain Attacks
📌 Cybercriminals infect software updates or hardware components used by defence contractors.
📌 SMEs with poor security controls become entry points for attackers targeting larger companies.
📌 Malware-infected supplier systems allow hackers to move laterally into critical networks.
💡 Example: The 2020 SolarWinds attack—one of the biggest cyber espionage campaigns in history—originated from a compromised software supplier used by defence and government organisations worldwide.
3️⃣ How Defence SMEs Can Strengthen Cybersecurity
✅ 1. Implement MOD Cybersecurity Standards
🔹 UK defence suppliers must comply with Cyber Essentials Plus & DEFSTAN 05-138.
🔹 Defence SMEs should follow NIST 800-171, ISO 27001, and Secure by Design principles.
🔹 Regularly audit supplier security to ensure compliance with MOD cyber requirements.
📌 Tip: Use a third-party risk management (TPRM) platform to monitor vendor security in real-time.
✅ 2. Deploy Multi-Factor Authentication (MFA) & Strong Passwords
🔹 Enforce MFA on all remote access, email accounts, and critical systems.
🔹 Ban the use of default passwords & weak credentials.
🔹 Use password managers to generate strong, unique passwords for every system.
📌 Tip: Over 80% of breaches involve stolen passwords—MFA stops 99% of password-based attacks.
✅ 3. Encrypt Sensitive Defence Data & Implement Access Controls
🔹 Encrypt all classified project files, schematics, and sensitive emails.
🔹 Restrict access to critical defence systems on a need-to-know basis (Zero Trust Security).
🔹 Regularly monitor who accesses what data & block unauthorised attempts.
📌 Tip: Use DLP (Data Loss Prevention) tools to block unapproved file sharing.
✅ 4. Improve Phishing & Cyber Awareness Training
🔹 Train all employees to spot phishing emails and social engineering scams.
🔹 Conduct regular phishing simulation tests to measure awareness.
🔹 Establish a clear reporting process for suspicious emails.
📌 Tip: Over 90% of cyberattacks start with phishing—training reduces risk.
✅ 5. Implement Endpoint Security & Ransomware Protection
🔹 Use Next-Gen Antivirus (NGAV) & Endpoint Detection and Response (EDR) tools.
🔹 Enable automatic patching & updates for software and firmware.
🔹 Backup all critical defence data and store copies offline to prevent ransomware damage.
📌 Tip: Limit USB access and use application whitelisting to block unapproved software.
4️⃣ Final Thoughts: SMEs Must Step Up Their Cyber Defence
Defence SMEs play a critical role in national security, but cybercriminals view them as weak links in the supply chain. A single vulnerability in a small contractor can lead to massive breaches affecting major defence firms and government agencies.
To stay ahead of evolving threats, SMEs must:
✔ Comply with MOD cybersecurity requirements (Cyber Essentials Plus, DEFSTAN 05-138).
✔ Use MFA, encryption, and Zero Trust security models.
✔ Continuously monitor supplier risk & implement strong access controls.
✔ Train employees on phishing awareness & incident response.
💡 Cybersecurity isn’t just a compliance issue—it’s a national security priority for every defence SME.
📢 What’s Next?
💡 Next in the series: “Zero Trust in Defence: Why It’s Essential for National Security”
Would you like a free defence cybersecurity checklist for SMEs? Get in touch today. 🚀
