Mr Wallace, who represents Wyre and Preston North, was quoted in the Mail on Sunday saying Britain's security services are in urgent need of investment as the country comes under attack from a growing number of threats.
He said assaults from all types of enemy, including cyber criminals, organised crime bosses, neo-Nazi right-wing extremists and terrorists, were leaving MI5 "stretched".
Acts of hostility such as last year's Novichok poisonings in Salisbury are not "one-offs", he warned, but are instead becoming even more sophisticated.
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Speaking to the Mail on Sunday, he said: "Security at home and abroad doesn't come cheap and we are going to have to invest in that and continue.
"We are going to need to do more if we are to keep one step ahead of those threats.
"In this game you are also trying to see what's over the horizon. For us to continue to keep pace, we're going to have to grow with it."
Mr Wallace, who has been security minister since 2016, told the paper that the security services are currently dealing with hundreds of active investigations.
He also warned that while the vast majority of terrorist plots against the country are by Islamic State and al Qaida, the threat of the so-called lone actor was growing.
Mr Wallace told the Commons Defence Committee earlier this year that some "individuals are starting to pose significant danger".
He said: "Historically, in the past, they had no friends, they sat on their own, they couldn't talk to anyone else - now they live in a virtual safe space.
"They communicate through the internet ... sometimes we find them actually looking at Isis (IS) terror manuals to learn how to make bombs - obviously for a different reason."
Last month, Home Secretary Sajid Javid announced the Government was preparing the way for a new espionage Bill to crack down on "hostile state" activity.
Mr Javid said reviews carried out in the wake of the Salisbury nerve agent attack had revealed "real gaps" in existing laws.