Rising Cybersecurity and Fraud Threats in Construction

Cybersecurity is no longer just an IT issue for construction companies.

It is now a project-risk, payment-risk, schedule-risk, and leadership issue.

That is the part many contractors still underestimate. A cyber incident does not have to take down the whole company to hurt the business. One compromised email thread can redirect a payment. One fake vendor-change request can move money to the wrong account. One ransomware event can freeze estimating files, project documents, payroll, field reports, or billing. One weak control around an outside platform can expose sensitive project, owner, or employee information.

Construction is especially exposed because the work depends on speed, trust, and constant coordination. Owners, contractors, subcontractors, architects, engineers, vendors, lenders, insurers, and field teams are exchanging documents and approvals every day. That flow keeps projects moving. It also creates openings for fraud.

The companies that treat cybersecurity as a back-office problem are going to miss the bigger point. In construction, cyber and fraud risk now sit inside operations.

The threat is growing because construction runs on trust

Construction companies move fast. They approve change orders, release payments, update vendor information, send drawings, share schedules, review contracts, and coordinate with dozens of outside parties.

That is exactly what makes the industry attractive to criminals.

The FBI’s 2025 IC3 Annual Report reported more than 1 million complaints and $20.877 billion in losses. Business Email Compromise alone accounted for 24,768 complaints and more than $3.0 billion in losses.

Those numbers matter because Business Email Compromise is not a faraway technology problem. It is one of the fraud risks most naturally suited to construction.

A project accountant receives an email that looks like it came from a known subcontractor. A vendor says banking information changed. A project executive receives a message that appears to come from an owner or senior leader. A controller sees a request that seems urgent because a payment deadline is tied to project progress.

The attack works because the communication looks normal.

That is why the risk belongs in leadership meetings, not just IT meetings.

Why construction is an easier target than many leaders think

Construction firms are not exposed because they are careless. They are exposed because the business model creates openings.

Projects require constant file sharing. Payment chains are complicated. Field leaders work from phones and tablets. Subcontractor relationships change by project. Many companies rely on outside accounting platforms, project management systems, cloud storage, estimating tools, and email-based approvals.

ENR reported that the construction industry is one of the most heavily targeted by cyber threat actors, and noted that business email compromise can exploit the speed and volume of communication between project participants. ENR’s cybersecurity construction coverage also pointed to operational disruption, data loss, intellectual property theft, and reputational damage as key impacts.

Marsh’s construction cybersecurity analysis reported that more than one-third of construction companies in its survey saw increases in phishing attacks, data breaches, and ransomware incidents as technology use expanded.

That is the practical problem. The same systems that help contractors move faster also give attackers more entry points.

This does not mean contractors should avoid technology. It means they need stronger controls around the way people use it.

The biggest fraud risk is often payment workflow

Fraud does not always start with a sophisticated breach. Sometimes it starts with a believable message at the wrong moment.

A subcontractor payment is due. A vendor sends updated banking information. A project manager is traveling. The accounting team is busy. The email thread looks familiar. The request feels routine.

That is where contractors get exposed.

Business Email Compromise targets the gap between trust and verification. The FBI recommends multi-factor authentication and direct verification of payment or purchase requests, especially changes to account numbers or payment procedures. The FBI’s Business Email Compromise guidance is simple, but important: verify payment changes through a trusted channel, not only through the email thread that made the request.

For contractors, that means payment controls should be treated like project controls.

A company would not let one person change the critical path without review. It should not let one email change payment instructions without verification.

A strong construction fraud-control process should include out-of-band verification for bank changes, dual approval for wire transfers, vendor-change logs, payment-authority limits, and a simple escalation rule when something feels rushed, unusual, or high pressure.

Ransomware creates jobsite consequences

Ransomware is not only a data problem. In construction, it can quickly become a project problem.

If systems are locked, estimating cannot access bid files. Project teams may lose access to drawings, submittals, RFIs, schedules, pay applications, or daily reports. Accounting may be unable to process payroll or vendor payments. Executives may have to make decisions with incomplete information.

The FBI reported more than 3,600 ransomware complaints in 2025, with reported losses exceeding $32 million, while also noting that reported ransomware losses often do not include lost business, time, wages, files, equipment, or third-party remediation costs. The same report identified contracting services, including electricians and general contractors, among the top non-critical-sector industries reported in ransomware complaints.

Travelers reported that the construction sector remained a primary target in 2024. That should get a contractor’s attention, especially when field operations, billing, and project documentation all rely on digital continuity.

The issue is not whether a company can afford better cyber controls. The issue is whether the company can afford operational disruption when a job is already under pressure.

Digital construction tools increase the leadership burden

Construction technology is useful. It is also expanding the risk surface.

Project management platforms, drones, cameras, cloud drives, estimating software, BIM tools, mobile apps, timekeeping systems, connected equipment, and AI tools all create efficiency. They also create data, permissions, integrations, vendors, and access points.

Verizon’s 2026 Data Breach Investigations Report says 31% of breaches now start with software vulnerabilities and ransomware appears in 48% of breaches. That matters for construction because many firms rely on a mix of internal systems and outside platforms to run the business.

This is where construction leaders need to avoid two bad extremes.

The first extreme is ignoring cyber risk because “that is IT’s job.” The second is creating so much friction that project teams work around the system. The better answer is a practical operating discipline: clear access rules, trained employees, protected payment processes, vendor controls, backups, MFA, patching, and leadership accountability.

Cybersecurity has to fit the way construction actually works.

What construction leaders should review now

A contractor does not need to become a cybersecurity company. But it does need to protect the workflows that would hurt the business most if they were compromised.

Start with the money. Who can approve wire transfers? Who can change vendor banking information? Who verifies payment changes? What happens if a request comes from a familiar email account but feels urgent or unusual?

Then review access. Who has access to estimating files, owner documents, project financials, employee information, and project management systems? Are former employees, inactive users, or outside vendors still connected?

Then review continuity. If the company lost access to email, project management software, payroll, or accounting systems tomorrow, what would happen in the first 24 hours? Who would make decisions? How would field teams keep moving?

This is where cyber risk connects directly to construction risk management. The goal is not to scare people. The goal is to find, price, assign, and reduce the risk before it damages the job.

Leadership matters because controls only work if the company enforces them. A policy nobody follows is not a control. A payment checklist that can be bypassed under pressure is not enough. A cyber plan that lives in a file but is not understood by operations will not hold up when the company is under attack.

The people side matters as much as the software

Many cyber and fraud failures start with human pressure.

Someone is busy. Someone is trying to keep a project moving. Someone trusts a familiar name. Someone does not want to slow down a payment. Someone clicks, approves, forwards, or changes a record because the request looks normal.

That is why this is also a leadership issue.

Strong contractors need finance leaders, operations leaders, project executives, controllers, IT support, and field managers who understand that speed without verification is not discipline. The right culture gives people permission to slow down when money, access, or sensitive information is involved.

This is also part of the broader construction executive hiring conversation. Contractors need leaders who can protect schedule, margin, client trust, and operational systems. As technology and fraud risk grow, that leadership profile gets broader.

A construction executive does not need to be a cybersecurity technician. But they do need to ask better questions, support stronger controls, and make sure people do not treat fraud prevention as an inconvenience.

The practical takeaway

Cybersecurity and fraud threats are rising because construction has become more connected, more digital, and more dependent on fast trust between many parties.

That creates opportunity for contractors. It also creates risk.

The best companies will not respond by slowing everything down. They will build cleaner controls around the workflows that matter most: payment changes, vendor onboarding, project documents, system access, backups, mobile devices, and outside platforms.

They will train people to recognize pressure. They will verify before money moves. They will prepare for disruption before a project is already exposed. They will treat cybersecurity as part of business discipline, not a side conversation.

For construction leaders, the message is simple.

Protecting the job now includes protecting the systems, payments, people, and information that keep the job moving.

The Birmingham Group helps construction companies think through the leadership roles and operating discipline needed to protect growth, margin, and project execution. As cyber and fraud risk become more connected to construction operations, the leaders who understand that connection will become more valuable.