January 21, 2026 – In 2026, AI will redefine cyber conflict. It’s already embedded in criminal toolkits and, alongside machine learning, it will standardise attack and defence tactics according to Kinetic IT, one of Australia’s largest privately owned sovereign technology services providers.
Tony Campbell, Enterprise Security Service Line Manager, Kinetic IT, said, “We can expect more sophisticated phishing and social engineering, powered by AI-generated content and deepfakes so convincing that spotting pretext without advanced tools will be near impossible. Adversaries will use AI to accelerate attacks, boosting speed, scale, and stealth. Autonomous ‘agentic’ malware will emerge, capable of scanning networks, finding vulnerabilities, and adapting tactics on the fly. Crime-as-a-service will deploy AI bots to run hyper-realistic phishing campaigns, complete with synthetic voices and deepfake videos impersonating trusted contacts.
“Defenders will respond in kind, with security teams increasingly relying on intelligent agents in security operations centres (SOC) to automate detection, correlation, and response. AI ‘tier zero’ analysts will handle triage, sift logs, prioritise alerts, and even execute containment actions in seconds, turning cutting-edge capabilities into standard practice. By year’s end, AI-driven triage and incident analysis will be commonplace.”
Along with the benefits, widespread AI adoption introduces new risks. Organisations must enforce strict identity and access controls for AI agents to prevent hijacking. New frameworks are expected, including ISO 42001 for AI Management Systems and standards focused entirely on AI threat models.
Tony Campbell said, “In 2026, the challenge is harnessing AI’s defensive power without letting it become the ultimate attack vector. Despite this, AI isn’t just an attacker’s weapon, it’s a game-changer for defenders. In 2026, intelligent automation will mean faster detection, smarter correlation, and near-instant response, dramatically reducing dwell time. Combined with adaptive security frameworks and ISO 42001 standards, these capabilities could transform resilience, shifting cyber security from reactive firefighting to proactive risk management.”
Five enterprise security predictions for 2026 for Australia’s most critical services
1. Room temperature quantum computing. While everyone debated AI ethics or questioned whether the latest large language model (LLM) has achieved consciousness, news from Stanford on room-temperature quantum communication was largely missed.
Tony Campbell said, “Quantum communication typically requires ultra-cold laboratory conditions, and it’s so fragile that even breathing near the equipment can ruin the experiment. Now, researchers have managed to send quantum signals at room temperature, using a novel method that stabilises those notoriously fragile quantum states. This is not a marginal improvement. Quantum communication, especially the sort that doesn’t require a cryogenic freezer the size of a small caravan, is the beginning of a strategic shift, because once quantum communication becomes affordable, portable, and industrial rather than academic, we enter the age of guaranteed interception detection.”
For all big organisations, this means a need to start thinking about quantum-resilient architectures and building future-proofed threat models, where we have determined the dependencies on vendors who may not yet be ready. This marks the beginning of this exciting part of the quantum computing timeline where the technology stops being a thought experiment and becomes more a race to commoditise.
2. Cyber security converges with wearable technology. In 2026, securing medical devices and wearables will become a top priority as these technologies become increasingly embedded in daily life. Rapid adoption creates a vast and vulnerable attack surface.
Tony Campbell said, “Wearables bring their own challenges. Health trackers and the data they collect—such as heart rate, location, sleep patterns—are prime targets. Breaches of fitness platforms or insurer wellness programs could expose deeply personal information. Expect moves toward security certification for consumer IoT health devices, building on Australia’s voluntary IoT Trust Mark and emerging smart device standards.”
3. Smart cities and critical infrastructure under siege. As cities race toward hyper-connectivity, the attack surface expands at breakneck speed. Every connected system is a potential entry point if security is weak.
Tony Campbell said, “In 2026, expect at least one major city to suffer a coordinated cyberattack with a real possibility of ransomware taking down IT networks and connected services. The pace of development demands faster modelling of attack scenarios, because the consequences of failure will be systemic and potentially catastrophic.”
The good news is that governments are responding. Australia’s Cyber Security Strategy (2023–2030) prioritises critical infrastructure protection, and sector-specific standards are emerging. Cities will run cyber emergency drills, map every connected asset, and enforce network segmentation to contain breaches. Collaboration will grow too, with national task forces and information-sharing hubs to tackle common vulnerabilities. The convergence of IT and operational technology (OT) means security teams must bridge gaps between traditional network defence and industrial control systems. In short, 2026 will test whether smart cities can also be safe cities.
4. Digital government faces heightened threats. As government services digitise, the stakes for cyber security are rising fast. Citizen portals, payment systems, and confidential databases are prime targets for both cybercriminals and nation-states.
Tony Campbell said, “In 2026, expect attackers to escalate tactics, moving beyond data theft to manipulation, such as altering permit records or health data to sow chaos. With elections looming in some jurisdictions, electoral systems and disinformation campaigns will face increased targeting as hacktivists and state actors seek to undermine trust.”
Australia’s National Office for Cyber Security and dedicated Cyber Security Coordinator will mature into whole-of-government defence hubs. Expect large-scale cyber drills, tighter breach notification laws, and critical services designated as ‘Systems of National Significance’ under the Security of Critical Infrastructure Act 2018 (SOCI Act). International collaboration will deepen through alliances like Five Eyes and Interpol, with joint defence operations and rapid-response pacts becoming the norm. Cyber deterrence will also evolve; sanctions on foreign hackers will become more common. 2026 will see governments as both high-value targets and key players shaping global cyber resilience.
5. Secure by design will not be optional. 2026 marks the tipping point where ‘security by design’ shifts from being a slogan to becoming the standard. Regulatory pressure is driving this shift in both Australia and overseas. The SOCI Act for example is pushing risk management into the heart of every critical infrastructure organisation.
Tony Campbell said, “Market forces reinforce this trend. Buyers now demand proof of security hygiene with ISO 27001 compliance, regular penetration tests, and secure coding practices becoming deal-breakers. Cyber insurance providers increasingly require evidence of controls before issuing policies. In practice, expect widespread adoption of DevSecOps ‘shift-left’ testing and secure coding training. Products will ship with multi-factor authentication enabled, encryption by default, and sensible privacy settings. Governments may introduce consumer-facing security labels for Internet of Things devices, similar to energy rating labels, to raise the baseline and eliminate low-hanging fruit like default passwords. Continuous compliance monitoring replaces annual audits, with dashboards providing real-time visibility into security posture.”
By the end of 2026, breaches caused by blatant negligence, such as ignoring critical patches, will face zero tolerance from regulators and partners. Security will no longer be bolted on; it will be woven into innovation.
About Kinetic IT
Kinetic IT is one of Australia’s largest privately owned technology services providers and delivers secure, sovereign ICT solutions across government, defence, and critical industry sectors. With a workforce of over 1,500 people and a strong national presence, we partner with organisations that play a vital role in Australia’s prosperity and security.
Our focus is on helping customers navigate complex challenges and deliver meaningful impact through technology. We combine deep technical expertise with a people-first approach, building trusted, long-term partnerships that enable transformation, resilience and sustainable growth.
Backed by a legacy of more than 25 years, Kinetic IT continues to invest in talent, innovation and service excellence – unlocking the potential of technology to create a better future for all Australians.
