Digital attacks are happening on "a scale and boldness not seen before", the National Cyber Security Centre (NCSC) and National Crime Agency (NCA) have warned.
In their first joint report, the NCSC and NCA also say that ransomware - software that makes a device unusable until a ransom is paid to the attacker - will target connected personal devices like phones, watches and TVs.
The report, which discusses the cyber threat to UK business, points to attacks on the Bangladesh Bank, Democratic National Party and Ukrainian power grid as examples of the increasing audacity of hackers.
That daring is being matched by the scale of attacks.
The report says 2016 saw the largest DDOS attack in history when websites including Twitter, Netflix and Spotify were knocked out of service after internet traffic management provider Dyn Inc was targeted with junk data traffic.
It adds that the largest cyber heist in history was also last year when hackers exploited Bangladesh Bank's SWIFT payment system to steal $81m (£66.7m).
The report identifies three key trends: The technical skill required to launch attacks is falling; more devices are coming online - from wireless routers to smart TVs - which potentially gives hackers more ways to attack; and hackers, whether governments or criminals, are increasingly learning from each other.
Identifying who is behind an attack is also becoming harder, with criminal groups imitating nation states in attacks on banks.
Likewise, sophisticated nation state hackers are using off-the-shelf malware and aping more the more basic techniques, such as DDOS attacks, more commonly associated with criminals.
Ransomware that targets mobile phones and smart TVs is singled out by the report.
"Ransomware on connected watches, fitness trackers and TVs will present a challenge to manufacturers, and it is not yet known whether customer support will extend to assisting with unlocking devices and providing advice on whether to pay a ransom," the report says.
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