The threat and cybersecurity landscape are evolving rapidly, bringing new complexities and challenges.
The domain of cybercrime has transformed from the activities of individual hackers into a sophisticated, global ecosystem involving organized criminal groups, state-sponsored attackers and automated cyber threats.
These risks extend beyond large corporations and government institutions to small businesses, ordinary Canadians and critical infrastructure, demanding a broader, more comprehensive approach to cybersecurity.
This analysis explores the cyber threats projected for 2025, emphasizing why Canadian businesses and individuals must enhance their cybersecurity measures, and outlining technical strategies and risk management practices — including cyber insurance — to mitigate these challenges.
12 cyber threats businesses must prepare for in 2025
This year is set to be a crucial inflection point for cybersecurity, shaped by:
- advances in artificial intelligence (AI)
- the growth of Ransomware-as-a-service (RaaS) or Cybercrime-as-a-service (CaaS)
- concerns over quantum computing
- increasingly sophisticated supply chain attacks
- geopolitical risks.
Let’s explore these emerging cybersecurity threats in more detail.
1. How AI is powering the next generation of cyberattacks
AI is expected to be at the forefront of both cyber offensive and defensive strategies.
Cybercriminals are increasingly using AI and machine learning to:
- automate attack processes
- personalize phishing campaigns
- bypass traditional security controls
AI-driven tools enable cybercriminals to analyze network behaviors, identify vulnerabilities and launch more sophisticated social engineering schemes. This evolution makes AI-enhanced cyberattacks one of the most difficult threats to counteract.
For Canadian businesses, the stakes are significant. A 2023 International Data Corporation (IDC) report revealed that 36% of Canadian firms had experienced AI-powered attacks, a figure that is likely to grow as more cybercriminals adopt AI technologies. With Cybersecurity Ventures predicting that global cybercrime costs will hit $10.5 trillion USD annually by 2025, AI’s role in driving these costs is expected to be substantial.
2. The growing threat of autonomous malware in cybersecurity
Autonomous malware, powered by AI and machine learning, is set to become a major threat in 2025. Traditional malware requires human guidance to propagate and carry out attacks. But autonomous malware can independently adapt its tactics and learn to evade security measures.
According to a 2023 Ponemon Institute study, 64% of organizations reported that AI-driven malware had become more challenging to detect over the previous year.
In Canada, the Canadian Centre for Cyber Security has already flagged several cases of AI-assisted malware that were able to evade conventional antivirus programs, signaling a shift towards more sophisticated threats in the coming years.
3. The role of deep learning models in cyberattacks
Deep learning, while useful for bolstering cybersecurity defenses, can also be weaponized by cybercriminals.
Cybercriminals are beginning to use deep learning models to bypass anomaly detection systems and refine attack methods. For instance, phishing attacks are being improved by training AI to craft personalized emails that are much harder to detect.
According to a report by Darktrace in 2023, 22% of Canadian organizations experienced sophisticated phishing attacks that utilized AI to tailor content. Additionally, the Royal Bank of Canada indicated that the effectiveness of AI-driven phishing attacks had increased by 32% in 2023 compared to previous years, making them a more serious threat moving forward.
4. How Ransomware-as-a-service (RaaS) or Cybercrime-as-a-service (CaaS) is lowering barriers for cybercriminals
Ransomware-as-a-service (RaaS) or Cybercrime-as-a-service (CaaS) has democratized cybercrime, allowing individuals with limited technical skills to conduct significant cyberattacks.
By purchasing or leasing ransomware toolkits from experienced developers, even non-experts can now execute devastating attacks. This trend is leading to a surge in ransomware incidents, affecting organizations of all sizes, including small to medium enterprises that often lack robust cybersecurity defenses.
According to Sophos’ 2023 Threat Report, 54% of Canadian businesses faced ransomware incidents, with average losses amounting to $2.3 million CAD when factoring in ransom payments, recovery efforts and downtime.
The prevalence of ransomware is projected to increase by 25% by 2025, targeting sectors like healthcare, education and finance that manage sensitive data. The emergence of “double/triple extortion” tactics, where criminals encrypt data and simultaneously threaten to leak it, will add further pressure on victims to meet ransom demands, which now average $812,000 USD globally, according to Coveware’s Q3 2023 report.
5. Quantum computing: An impending cybersecurity challenge
While quantum computing remains in its developmental stages, it is anticipated to become a major cybersecurity concern in 2025.
The ability of quantum computers to perform calculations exponentially faster than traditional computers threatens to break current encryption algorithms that secure everything from financial transactions to military communications. This poses significant risks to data privacy and integrity.
Canadian organizations face the danger of compromised intellectual property, financial fraud on a grand scale and exposure of sensitive data. Widely used encryption protocols like Rivest-Shamir-Adleman (RSA) and Elliptic-Curve Cryptography (ECC) may soon become obsolete, necessitating a shift to quantum-resistant algorithms.
The World Economic Forum has flagged quantum-safe encryption as a top cybersecurity priority for the next decade (although some estimate that encryption will be cracked by 2028-2030). The National Institute of Standards and Technology (NIST) is currently working to develop post-quantum cryptography standards, but businesses must start preparing now to transition their encryption protocols to these quantum-safe standards.
Harvest Now, Decrypt Later
A growing concern tied to quantum computing is the “harvest now, decrypt later” (HNDL) strategy. While quantum computers capable of breaking current encryption algorithms may still be a decade away, the exponential progress in quantum technology makes this a credible long-term threat.
Cybersecurity experts predict that sensitive data stolen today could be decrypted within 10 to 15 years, especially as nations and organizations continue to invest heavily in quantum research. This timeline underscores the urgency for organizations to begin transitioning to quantum-resistant encryption to safeguard their long-term data security. In this approach, attackers intercept and store encrypted data today, anticipating quantum advancements to decrypt it in the future.
6. The rise of sophisticated supply chain cyberattacks
Supply chain attacks, where attackers exploit third-party vendors’ vulnerabilities to infiltrate a company’s network, are becoming more advanced and frequent.
These attacks can bypass direct security measures, giving cybercriminals access to critical systems. The infamous SolarWinds breach of 2020, which compromised thousands of organizations through a software provider, highlights the potential for systemic cyberattacks that disrupt not just a single target, but entire sectors and exemplifies the potential scale of damage.
In Canada, the 2023 Canadian Cybersecurity Survey reported that 34% of businesses experienced a supply chain attack.
The interconnected nature of supply chains means that a breach at one vendor can trigger a systemic cyber event, causing a cascading impact across multiple organizations and significantly affecting both operational continuity and data security.
7. The growing cyber threat of deepfakes and synthetic identity fraud
Deepfake technology is evolving rapidly, making AI-generated content indistinguishable from real-life audio and video.
Deepfake-driven schemes, such as fraudulent business transactions and impersonation attacks, are expected to rise significantly in 2025. Scenarios could include employees being deceived by convincing videos of executives requesting sensitive information, leading to data breaches or financial losses.
Synthetic identity fraud, where attackers blend real and fictitious data to create fake identities, is also becoming a major concern. In 2024, Canada reported a 15% rise in synthetic identity fraud cases, according to the Canadian Anti-Fraud Centre. As cybercriminals continue to refine their techniques, this trend is likely to intensify.
8. IoT vulnerabilities and their impact on cybersecurity
The proliferation of Internet of Things (IoT) devices is expanding the potential attack surface for cybercriminals.
In industries like healthcare, manufacturing and smart cities, the number of connected devices is rising sharply, leading to significant security challenges.
The global number of IoT devices is projected to reach 75 billion in 2025, up from 30.9 billion in 2020, according to Statista.
In Canada, a 2023 CIRA Cybersecurity Survey found that 41% of Canadian businesses had IoT devices in their network, yet only 26% reported having a dedicated IoT security policy. The increased interconnectivity raises the risk of widespread disruptions if these devices are compromised.
9. How cloud security gaps expose businesses to cyber threats
As cloud adoption accelerates, so do the associated security risks.
Many businesses are still struggling with misconfigurations, which can expose sensitive data. Misunderstandings between cloud providers and customers can also create significant security gaps.
Gartner predicts that 99% of cloud security failures will be the customer’s fault in 2025, largely due to misconfigurations.
In Canada, a 2023 survey by the Canadian Internet Registration Authority (CIRA) revealed that 37% of businesses had suffered a cloud security incident within the past year, with misconfigured cloud environments cited as a leading cause.
10. Why geopolitical tensions increase cybersecurity risks
Geopolitical tensions are increasingly influencing the nature and scope of cyber threats. As international conflicts intensify, state-sponsored cyberattacks are becoming more frequent and sophisticated. Countries such as Russia, China, Iran and North Korea (and even “friendly” nations like the US, France, Israel, the UK, India and Germany) are actively using cyber operations as tools for political, security and economic gain, targeting not only government agencies but also critical infrastructure and private sector companies.
The implications are serious for Canadian businesses. Geopolitical risks could manifest as direct attacks on industries critical to national security, such as energy, telecommunications and transportation. Additionally, the nation’s allies and trade partners may experience cyberattacks that disrupt international supply chains and spill over into Canada. The Canadian Centre for Cyber Security has noted an uptick in cyber espionage attempts linked to state-sponsored actors seeking sensitive intellectual property and personal data.
11. Cyber mercenaries are redefining hybrid warfare
Hybrid warfare, which combines traditional military tactics with cyber operations, is becoming more common.
Nation-states are increasingly employing cyber mercenaries — professional hackers offering their services for hire — to conduct operations that are hard to trace back to the originating country.
The Canadian Armed Forces released a report in 2023 indicating that state-sponsored cyber espionage attempts against Canadian organizations had increased by 35% over the past three years. Additionally, the University of Toronto’s Citizen Lab reported a rise in cases of “cyber outsourcing,” where mercenary groups carried out politically motivated attacks.
12. The role of social media manipulation in cyber propaganda
Cybercriminals and state-sponsored actors are increasingly using social media as a tool for disinformation and cyber propaganda. This threat is expected to intensify in 2025, with automated bots and deepfake videos used to manipulate public perception or damage corporate reputations.
The Digital Democracy Project, an initiative by the Public Policy Forum and McGill University, found that during the 2019 Canadian federal election, more than 10% of Twitter (now X) accounts discussing political issues were suspected bots. Furthermore, a 2024 report by Global News estimated that disinformation campaigns cost Canadian businesses $1.6 billion annually due to reputation damage and lost sales.
The need for cybersecurity vigilance in the Canadian market
The evolving threat landscape necessitates a proactive stance for Canadian businesses and individuals.
Here are key factors that underline the urgency:
- High small to medium enterprises vulnerability: With more than 98% of Canadian enterprises being small to medium-sized, these businesses often lack the resources to implement robust cybersecurity measures. Yet, they hold valuable data and may serve as gateways to larger organizations.
- Global supply chain integration: Canada’s involvement in global supply chains introduces risks that extend beyond national borders. As cybercriminals exploit vulnerabilities in foreign suppliers, Canadian firms become susceptible to indirect cyberattacks, particularly if security protocols are inconsistent across regions.
- Critical infrastructure risks: Canada’s essential services, such as healthcare, energy and transportation, are high-value targets for cyberattacks. In 2022, 35% of Canadian healthcare providers reported ransomware incidents, as per the Canadian Internet Registration Authority (CIRA). With ongoing digitalization, these sectors are at increased risk.
- Increasing regulatory pressure: Canada’s regulatory landscape is evolving to address rising cyber risks. Organizations must not only comply with existing laws, such as the Personal Information Protection and Electronic Documents Act (PIPEDA), but also prepare for stricter data protection requirements that may be introduced within the next year.
- Data sovereignty concerns: As data flows across international boundaries, concerns over data sovereignty and compliance with foreign regulations (e.g., the EU’s General Data Protection Regulation – GDPR) add complexity to Canadian businesses’ cybersecurity strategies.
- Growing insider threat risks: With more employees working remotely, the risk of insider threats — whether intentional or accidental — is rising. Employees may inadvertently compromise security through phishing, social engineering or the use of unsecured devices.
6 strategies to protect your business from cyber risks in 2025
To combat these emerging cyber threats, businesses must adopt comprehensive cybersecurity strategies.
The following six recommendations can boost your organization’s technical defences and risk management practices.
1. Leverage AI-driven tools to detect and prevent cyber threats
AI-based cybersecurity solutions are essential for keeping pace with sophisticated cyber threats. Tools that employ machine learning can analyze vast amounts of network traffic data, detect anomalies and identify potential threats in real time. This includes:
- Next-generation firewalls (NGFW): These firewalls go beyond traditional filtering by inspecting data packets at the application level, allowing for more precise threat detection.
- AI-powered endpoint detection and response (EDR): EDR tools can detect endpoint behaviors associated with ransomware or other malware, initiating automated responses to isolate compromised devices.
- User and entity behavior analytics (UEBA): By monitoring user behaviors and detecting deviations from established patterns, UEBA tools can identify insider threats and compromised accounts.
2. Prepare for quantum computing threats: The role of quantum-resistant cryptography
Given the advancements in quantum computing, businesses should begin transitioning their encryption protocols to quantum-resistant standards. This includes:
- Implementing hybrid encryption models: Combine current encryption algorithms with quantum-resistant algorithms to provide dual-layer protection.
- Staying updated with the National Institute of Standards and Technology (NIST) standardization:Regularly review guidelines from the NIST’s Post-Quantum Cryptography Standardization Project to adopt emerging quantum-safe protocols.
- Assessing vulnerable assets: Identify critical data and systems that rely on outdated encryption and prioritize their transition to quantum-resistant measures.
3. Secure your network with a zero trust security framework
Zero trust architecture is a modern approach that assumes no user, device, or application is trusted by default. Key steps for implementing zero trust include:
- Continuous user authentication and authorization: Requiring multi-factor authentication (MFA) for all users and regularly verifying access credentials.
- Micro-segmentation: Dividing the network into smaller segments to limit lateral movement in case of a breach.
- Enhanced data encryption: Encrypting data both at rest and in transit to prevent unauthorized access.
4. Build a cyber resilient workforce with regular cybersecurity training
Human error remains a leading cause of data breaches, making regular cybersecurity training essential. Training programs should:
- Simulate phishing attacks: Conduct frequent phishing simulations to teach employees how to recognize malicious emails.
- Implement security awareness modules: Offer modules that cover topics such as secure password practices, device management and incident reporting.
- Enforce multi-factor authentication (MFA): Train employees (including the C-Suite) on the importance of MFA and ensure it is used across all critical systems.
- Establish a security-first culture: Encourage employees to report potential threats and share cybersecurity updates regularly.
5. Monitor third-party vendors for cybersecurity compliance
Given the rise in supply chain attacks, organizations must scrutinize their third-party vendors’ cybersecurity practices. This can be achieved through:
- Vendor risk assessments: Evaluate vendors’ security measures, incident response capabilities and compliance with industry standards.
- Contractual security requirements: Include clauses in vendor contracts that mandate regular security audits and compliance with specific cybersecurity standards.
- Continuous monitoring: Utilize third-party risk management platforms to detect changes in vendor security posture and respond to emerging threats.
6. Invest in cyber insurance to help mitigate privacy breach and liability risks
Cyber insurance is a critical component of an overall risk management strategy. Key considerations include:
- Coverage for evolving threats: Policies should address modern risks such as ransomware payments, data breaches, business interruption and double/triple extortion scenarios.
- Access to incident response experts: Insurers often provide access to cybersecurity specialists who can assist with breach containment, forensic analysis and regulatory compliance.
- Regular policy reviews: As cyber risks evolve, businesses should update their cyber insurance policies to ensure coverage reflects current threat landscapes and regulatory changes.
- Incorporating policy incentives: Some insurers offer premium discounts for companies that adopt advanced cybersecurity measures, such as AI-based threat detection or zero trust frameworks.
Strengthen your cybersecurity strategy: Stay vigilant and prepare for emerging cyber threats
The cyber threat landscape is increasingly becoming more complex and challenging.
With AI-driven cyberattacks, ransomware, quantum computing, deepfakes and geopolitical risks on the rise, Canadian businesses and individuals must adopt a proactive approach to cybersecurity.
By leveraging cutting-edge technologies, implementing zero trust principles, preparing for quantum threats and investing in comprehensive cyber insurance, your business can mitigate risks and stay ahead of evolving cybercriminal tactics.
For Canadian enterprises, vigilance, investment in innovative security solutions, and preparedness for new and emerging threats will be essential to thrive in the digital landscape of 2025.
Aliya Daya, Senior Client Executive, serves as a Cyber Technical Specialist and National Mixed Specialties Practice Team Lead at Acera Insurance. With more than 25 years of experience in the insurance industry, Aliya specializes in innovation, technology, cyber insurance and privacy breach, political risk, manufacturing/fabrication/wholesale/distribution, hospitality, healthcare, banking/finance, non-profit and faith-based organizations, as well as disruptive and emerging industries.
You can reach Aliya at 403.717.5895 or [email protected].