No matter how clever your product, a single cyber-security incident can destroy trust and jeopardise survival. Regulators know this, and the Cyber Security and Resilience (Network and Information Systems) Bill introduced in November 2025 represents a step change in expectations. The bill broadens the scope of the existing Network and Information Systems Regulations to cover more operators of essential services and digital service providers, including managed service providers, data centres with more than 1 MW capacity and load controllers exceeding 300 MW. It gives authorities the power to designate 'critical suppliers', imposes stricter incident notification rules (initial alerts within 24 hours and a full report within 72 hours) and mandates notifying customers likely to be affected.
Rising stakes: fines and board accountability
Perhaps most significantly, the bill allows for fines up to 17 million pounds or 4% of global turnover for serious breaches and 10 million pounds or 2% for lesser offences. These penalties put cyber security on the same footing as data protection under the GDPR and make it impossible for boards to treat it as an IT problem. The government's guidance emphasises board-level oversight and recommends using the National Cyber Security Centre's (NCSC) Cyber Assessment Framework and Cyber Essentials certification. The benefits are quantifiable: organisations with a Cyber Essentials certificate are 92% less likely to claim on cyber insurance. For a seed-stage startup, the cost of certification may seem high, but compared with the fallout of a ransomware attack or a fine approaching eight figures, it is money well spent.
Practical steps for startups
The NCSC's small business guidance advocates basic controls: use strong passwords and multi-factor authentication, keep software updated, limit administrator privileges, back up data and train staff. For distributed teams, implementing identity-aware proxies and hardware security keys can reduce the risk of credential stuffing and phishing. Regular penetration testing and bug bounty programmes may sound like luxuries, yet they can reveal vulnerabilities before adversaries exploit them. The Cyber Resilience Bill codifies this proactive mindset by requiring operators to notify regulators about any event capable of having a future impact, not just incidents that have already caused harm.
Beyond technology, culture matters. Remote and hybrid working have blurred the boundaries between personal and corporate devices. ONS data shows that 27% of workers in Great Britain were hybrid in October 2025 and 13% worked fully remotely. Employees often use consumer cloud services and personal laptops; without clear policies and training, these become attack vectors. SMEs often lack dedicated security teams; founders must allocate time to establish security champions and run table-top incident response exercises. The House of Lords' inquiry into hybrid working recommended anchoring certain days for in-person collaboration and training - an approach that can be adapted to cyber-security drills.
Navigating vendor and supply-chain risk
Modern startups rarely build everything in-house; they rely on cloud providers, payment processors and SaaS tools. The new NIS bill empowers regulators to designate critical third parties, meaning that if your cloud provider is deemed critical, your own compliance obligations may increase. When choosing vendors, evaluate their compliance posture (do they hold ISO 27001 or SOC 2 certificates?), their incident response commitments and their data-handling practices. Supply-chain attacks - where hackers compromise software updates or dependencies - are an increasing threat. Using software composition analysis tools and staying on top of patch advisories is essential. Under the bill, not reporting a supply-chain incident promptly could lead to fines.
Balancing innovation and security
There is a tension between the desire to ship product features quickly and the discipline needed to harden them. In early-stage companies, developers often hold both engineering and security roles. Embedding DevSecOps practices - such as automated security tests in CI/CD pipelines - can mitigate this. Startups can also leverage open-source security tools: static analysis, vulnerability scanners and intrusion detection systems are increasingly accessible.
Finally, remember that resilience is a continuous process, not a checkbox. Threats evolve, and so must defences. The cost of implementing security controls may seem high for a lean team, but the potential for reputational damage, lost data and regulatory fines is higher. In 2026 cyber security is not just a technical imperative but a survival issue for UK startups.