Two Mid-Market Cybersecurity Blind Spots: Identity and AI Use

Often, the typical spend areas in mid-market cybersecurity budgets are a given: threat detection and response, cloud security, and risk management. According to RSM’s 2026 Middle Market Business Index cybersecurity report, those three areas demand 39%, 36%, and 35% of the field’s attention respectively.

Digital identity is arguably the most exploited entry point into any organization, but it didn’t crack the list of priorities. RSM’s researchers referred to it as a “significant missed opportunity,” and the data supporting their assertion backs it up.

The reason is simple: many bad actors don’t have to break through your system’s defenses. Sometimes, they just log in. Many breaches start with a stolen password or an unmanaged privileged account or a credential nobody considered revoking.

With mid-market firms turning increasingly to AI adoption and utilizing AI agents, the opportunity for bad actors to exploit a vast number of authorized non-human (AI-generated) identities has exploded. A staggering majority of companies have experienced AI-related security threats or near-misses, as reported in Netrio’s Mid-Market AI Readiness Report. This blog will look at identity access and cybersecurity with a new lens: where AI agents can be used to exploit your organization’s weak points, and what you can do about it.

The State of Identity Security in the Mid-Market

Some mid-market businesses are paying attention to identity, but plenty of organizations are looking past it. RSM’s research found that about half of mid-market businesses have a real identity backbone to their cybersecurity environment, while the other half are patching together partial controls.

81.8% of mid-market organizations are either implementing AI or already have widespread use of it according to Netrio’s Mid-Market AI Readiness Report. AI brings clear value, from efficiency and automation to deeper work and productivity, but it also wrenches open potential risks. The proliferation of AI raises the ability for bad actors to utilize its efficiency and automation to breach security gaps.

Recent news shows that data breach notices have surpassed the record-setting 2025 numbers as AI plays a huge role in rising cybersecurity threats.

How AI Complicates Identity Access

AI agents, scripts, tools, and automated workflows need credentials to do their job, and those nonhuman identities are multiplying at a rate that most in-house governance programs can’t scale with.

For many organizations, tools that utilize AI have been around for years. But the recent boom of agentic AI has introduced digital “workers” that need to be authorized, monitored, and audited the same as any other human identity. In fact, there is perhaps more urgency in creating guardrails around AI “workers” because of the speed and scale with which they act.

Netrio’s report found that only 26% of respondents said AI is scaled and governed enterprise-wide, while 73% of respondents said they’d either confirmed an AI-related security incident or narrowly avoided one. That points to a clear trend: many mid-market companies are rapidly deploying AI, but they can’t build up the necessary identity and access controls to govern what AI can and can’t touch.

Identity and Access in the Age of AI

AI has rapidly transformed the way organizations do business. By introducing a layer of efficiency and automation, many mid-market organizations are able to compete in the market alongside larger enterprises with deeper pockets and more IT talent.

Often, those larger enterprises embed security into every step of the process, especially when introducing a powerful tool such as AI. However, efforts such as passwordless authentication and biometric verification have become more accessible for companies without the deep budgets of large enterprises. The technology to secure mid-market businesses exists. Now, companies must prioritize identity in an effort to manage risk.

With AI adoption outpacing its governance, identity is one of the first places where gaps can begin to show up because it’s a layer that every other system depends on. A detection tool can’t prevent an attacker who logged in with stolen credentials the system marked as valid.

For mid-market IT leaders charting their security strategy for the second half of 2026 and looking ahead to 2027, the focus should be on whether they know who, and what, has access to their systems, including non-human (AI) identities.

Identity, AI, and Cybersecurity with the Right Partner

Many mid-market companies don’t have the budget to staff full IT and cybersecurity teams. That’s why many choose to work with managed service providers (MSPs) and managed security service providers (MSSPs) to act as an extension of their organization.

Netrio is a pioneer of next-generation managed services, offering a full suite of solutions for high-growth enterprises at any stage of need: from AI adoption to implementation and governance or managed IT and cybersecurity.

When it comes to protecting your cyber environment through identity, it’s important to work with a partner who understands the landscape. Netrio’s Cybersecurity and AI services go hand-in-hand in informing how to keep your organization safe so it can keep growing and delivering.

Ready to make sure your organization’s identity management is secure? Contact us today.