Any business that has an online presence is vulnerable to a cyberattack. Most vulnerabilities are due to legacy or unpatched systems that still power core operations, exposing critical entry points. However, the biggest weakness isn't always technical, but in a company's perception.

Too many businesses are dangerously overestimating their cyber resilience because they see investments in digital tools and services as an all-in-one solution. This false sense of protection can create a blind spot, leading to significant financial losses and reputational harm if left unresolved.

Here is why this happens and how businesses can accurately test and strengthen their security posture.

Cyberattacks have become more prevalent in recent years, with healthcare, finance, and manufacturing the most targeted industries due to their valuable data and the ways this information can be exploited. In fact, nearly six in 10 companies had to protect themselves from ransomware incidents.

Despite these sobering numbers, Bain & Company revealed that 43% of industry leaders believe they're following the best cybersecurity practices, yet only 24% of those actually met the standards. This complacency creates a gap between perceived and actual readiness, leaving firms vulnerable to ransomware, data loss, and extended business downtime.

What causes this disconnect between confidence and actual cybersecurity readiness? It can stem from various factors, which may be technical, organizational, or psychological. Here are some of the most common reasons:

• Outdated metrics and reporting: Many companies still rely on traditional means, such as checklists, compliance audits, and static reports, to assess their security posture. These are often circumstantial and limited by conditions, not real-world attack scenarios. They fail to reflect actual effectiveness, meaning companies may look compliant on paper but still be vulnerable in practice.

• Overreliance on tools: Even the top-shelf cybersecurity solutions do not guarantee bulletproof protection. Misconfigured firewalls, unmonitored endpoints, or unpatched vulnerabilities can still provide easy access points for hackers despite the presence of well-known products. A slight human error and slow response time can easily lower defenses.

• Gaps between leadership and reality: There's often a communication disconnect between IT teams and executives. Leaders may receive sanitized, oversimplified updates that do not truly reflect the actual hazards. This is done either to avoid panic or due to time and resource constraints that limit a team's ability to prepare detailed and well-contextualized risk analyses.

• Human bias and the illusion of control: Psychologically, it's easy to assume an organization is covered after investing in cybersecurity products or completing an audit. However, this is an illusion of safety unless those systems are continuously tested and validated.

Knowing the red flags can help businesses identify whether they're among the overconfident majority. Here are five common indicators:

If an organization has never performed a breach and attack simulation (BAS) or red team exercise, it's likely operating in the dark. These simulations expose real-world weaknesses that standard security reviews often miss.

Security posture assessments should occur regularly, especially as business environments, tools, and threats evolve. Relying on annual reviews or outdated risk models is a strong sign of overconfidence. It is generally recommended to evaluate risk annually, but some companies benefit from quarterly or even monthly reviews.

Mistaking regulatory compliance for comprehensive protection is common, but it's a misleading reality. Compliance provides a baseline, not a guarantee that a business will likely survive an attack.

Assessing a company's resilience must include evaluating its risk exposure. Micro, small, and medium Enterprises (MSMEs) can take a critical hit from a cyberattack. If a recovery plan hasn't been tested under stress, it's unlikely to hold up in a real-world scenario with much higher stakes.

True cyber resilience is cross-functional, not only the responsibility of the IT team. If executive leaders, finance, operations, and legal teams aren't involved in incident response planning, the organization may not be as prepared as it thinks. With 95% of data breaches tied to human error, any employee can jeopardize the company.

Organizations must conduct realistic and data-driven inspections of their current readiness to bridge the gap between confidence and actual capability.

A good starting point is a comprehensive security posture assessment (SPA). It probes into the technical controls a business has set up, including firewalls, EDR configurations, and access management policies. It also considers employees' user behavior, such as their susceptibility to phishing or unsafe browsing habits on company computers. SPAs help identify gaps in policy enforcement and recovery preparedness.

Running BAS tools helps businesses examine how well their systems can survive the latest adversarial tactics by emulating them. These technologies run thousands of real-world tactics, techniques, and procedures mapped to MITRE ATT&CK frameworks to highlight where current defenses fail before a threat actor exploits them.

Organizations must also track and benchmark key performance indicators, such as the mean time to detect (MTTD) and the mean time to respond (MTTR). If it takes a team days to detect an intrusion versus the industry standard of hours for well-prepared corporations, they may not know how to react in real-time.

Simulate attack scenarios involving all departments, from the C-suite to front-line responders, to ensure everyone understands their role in a crisis. These exercises reveal critical coordination gaps that technical testing alone cannot.

For example, who notifies law enforcement if a ransomware attack encrypts customer data and demands payment within 24 hours? Who speaks to the media? Does the legal team know if ransom payment is allowed under local laws? These exercises expose coordination gaps and practice decision-making under pressure.

Validating backup and recovery systems under real conditions is nonnegotiable. Many firms skip stress testing continuity plans, assuming backup systems will work. In reality, backups can be encrypted by the same ransomware if not properly segmented.

Routinely run live restoration drills from cold storage, cloud snapshots, and isolated backup networks. Check if the customer database can be fully restored within a 24-hour recovery time after simulated data corruption. If it takes longer or fails outright, the business continuity plan needs revision now, not after a breach.

Once the gaps are identified, businesses must act quickly and decisively to reinforce their defenses. Here's how:

• Integrate continuous testing and monitoring. Cyber resilience isn't a one-time project. It requires ongoing validation of security controls, updated threat intelligence, and 24/7 monitoring.

• Boost employee security awareness. During phishing exercises conducted by Cybersecurity and Infrastructure Security Agency (CISA) assessment teams, eight out of 10 businesses had at least one employee who fell for a phishing attempt. Regular training can dramatically reduce phishing success rates and insider threats, particularly as generative AI tools make threats more advanced and challenging to spot.

• Align cybersecurity with business continuity planning. Digital resilience is both prevention and rapid recovery. Ensure that IT disaster plans align with broader business continuity strategies.

• Partner with specialists as needed. Third-party experts offer specialized tools and assessments to fill in-house skill gaps. Don't hesitate to seek help to uncover blind spots and validate security programs.

The harsh truth is that if organizations haven't rigorously tested their defenses in the past six months, their cyber resilience is likely far below what company leaders assume. Overconfidence can be more damaging than being underprepared, because it prevents businesses from taking action to protect themselves.

Business leaders should not wait for a breach to be a wake-up call. By honestly assessing security posture, testing rigorously and acting proactively, companies can replace misplaced confidence with genuine resilience by assessing security posture, testing rigorously, and acting proactively.