IBM Study: Average Data Breach Cost in the Middle East Climbs to $8 Million in 2026
The average cost of a data breach in the Middle East has risen to US$8 million in 2026, according to IBM’s latest Cost of a Data Breach Report, highlighting the growing financial impact of cyberattacks as threat actors increasingly leverage artificial intelligence.
The annual study found that 26% of malicious breaches in the region involved AI-enabled attacks, while a further 11% of organisations were unable to determine whether AI had been used. Despite the rising threat, nearly a quarter (23%) of surveyed organisations had yet to adopt AI and security automation, even though organisations using these technologies experienced average breach costs that were more than US$3 million lower than those that did not.
Identity and access management weaknesses emerged as the biggest contributors to higher breach costs. IBM identified mismanaged secrets and keys, excessive user privileges and poor role management, along with an inability to prioritise threats effectively, as the leading factors increasing financial losses. Conversely, organisations that had implemented encryption, DevSecOps practices and endpoint detection and response (EDR) technologies experienced significantly lower breach costs.
Lost business remained the largest financial consequence of a breach, averaging US$3.57 million per incident, followed by post-breach response costs of US$2.17 million, detection and escalation costs of US$1.9 million, and notification expenses of US$360,000.
The financial services and technology sectors recorded the highest average breach costs in the region, at US$10.67 million each, while industrial organisations followed at US$9.6 million.
“As the number of cybercriminals harnessing AI for malicious purposes continues to grow, attacks are becoming faster and less expensive to launch, while the cost of detecting and remediating breaches continues to rise,” said Saad Toma, General Manager of IBM Middle East and Africa. “This widening gap is fundamentally changing the economics of cyber risk, making AI-driven threat detection, automation and rapid response essential for organisations looking to stay ahead of increasingly sophisticated attacks.”
The report also found that 59% of organisations plan to increase cybersecurity investments following a breach, with identity and access management (44%) identified as the top investment priority. Incident response planning and testing, alongside quantum security for protecting data and data transfers, were each cited by 39% of respondents.
Despite growing awareness of encryption best practices, only 35% of breached organisations had encrypted sensitive data both at rest and in transit before the incident occurred. However, 69% reported having formal controls in place to manage cryptographic assets across the organisation.
The study also highlighted the growing importance of securing machine identities as AI adoption accelerates. Among organisations operating a security operations centre (SOC), 55% had deployed AI agents, while 57% had implemented machine identity inventory and lifecycle management, including automated tracking of service accounts and API keys. Additionally, 43% had extended zero-trust principles to non-human identities.
Phishing remained the most common initial attack vector, accounting for 18% of breaches and resulting in an average cost of US$10.41 million. Supply chain compromises and social engineering attacks, including IT helpdesk impersonation and multi-factor authentication fatigue, each accounted for 16% of incidents.
Conducted by the Ponemon Institute and sponsored by IBM, the 2026 Cost of a Data Breach Report analysed real-world breach data from 602 organisations worldwide, including organisations in Saudi Arabia and the UAE, covering incidents that occurred between March 2025 and February 2026.
