Ransomware Attacks and Financial Damages – Breaking the Attack Chain Ransomware, a type of malware, uses encryption to prevent or limit data access until payment is made.
Ransomware attacks can cause collateral damage to businesses’ revenue that is often greater than the ransom amount and the decision to pay it. The financial consequences can be extensive and far exceed the ransom.
The ransom
Experts advise against ransom payments by companies as they give cybercriminals an incentive to keep going. Companies that pay ransoms are often disappointed.
- They have lost the data they recovered.
- They demand more money from attackers.
- The attackers disappear and don’t get their data back.
Recent research by Pao Alto and Sophos has shown that the average ransomware attack cost is between $570,000 to $812,360.
It is unlikely that cybercriminals will be able to decrypt your data, as they use asymmetric encryption methods. You can’t pay the ransom if you don’t want the data to be decrypted. However, you will have to either recover it from backups or replicas or you could lose it all.
It is best to minimize your losses after a ransomware attack and follow your incident response procedure. You may be able recover your data quickly and without any disruption if you have a solid recovery plan. A recovery plan typically includes five steps: assess and mitigate, respond, communicate, retrospect, and communicate.
It is better to prevent than to try and repair the damage that a ransomware attack could cause. Perception Point explains how to reduce the chance of becoming a ransomware victims.
Downtime and labor costs
Financial losses can occur when your systems go down. It takes most organizations at least one week to recover data. Sometimes, it can take much longer. Your entire operation will be affected if it is not restored. Without customer data, it is difficult to run a business smoothly. You will struggle to sell products or service clients. During downtime, a typical productivity loss of up to 20% can occur.
The Kaseya attack impacted approximately 1,500 managed service provider customers in a ransomware attack on 2021. This illustrates how supply chain attacks can cause more damage than attacks on single individuals.
IT departments often need to work overtime in order to restore systems. There is also a lot of work that needs to be done within an organization because they don’t have access to the data. Data issues may require additional specialist or consulting support.
How much does it cost to build a brand reputation
It is difficult to restore a damaged brand reputation, which can also have a significant financial impact. Negative publicity about data breaches can have a negative impact on the customer relationship as well as those of employees, investors, and other stakeholders. According to the National Cyber Security Alliance, 60% of small and medium businesses close down within six months after a data breach.
Legal expenses
Cybercriminals are increasingly threatening to expose sensitive data that they have stolen prior to encryption. This can lead to catastrophic damage in cases where the data is critical (e.g., hospitals, government, or emergency call centres).
Clients can seek direct compensation from the company for data breaches in some industries. Scripps Health and Colonial Pipeline, a major retailer, are just a few of the companies that have been subject to class-action lawsuits.
Companies don’t want long court battles and most cases settle out of court. For the leak of financial and personal information, such as credit card numbers, regulatory and legal penalties can be very high.
Collateral damage and data loss
Ransomware attacks can cause data loss. This could cost you hundreds of hours. Even if backups can be restored, there is a possibility that files were not properly backed up. Ransomware is a type of ransomware that targets backup systems and prevents you from restoring data.
It is necessary to determine how cybercriminals got access to your system. They can attack your software vulnerabilities in many ways, including sending out phishing email and creating fake websites.
It is possible that infected computers will need to be completely reformatted and the software reinstalled. To prevent another data breach, you will likely need additional protection.
The current economic situation, with inflation and recession may lead to significant financial losses. According to various reports, the average cost of recovering from a ransomware attack could reach $1.85 million in 2020. You could be at risk of another attack if you don’t get rid of your data and address any underlying issues.
How can you prevent ransomware attacks
- Ransomware attacks can be prevented by having security systems in place, training employees, and strong configuration management.
- It is important to keep up-to-date with the most recent operating software.
- You can recover data by having up-to-date and complete backups.
- Make sure your computer systems are up-to-date and make sure you have security patches installed.
- You should always check your security regularly to ensure you have the correct measures in place.
It is important for IT professionals to adopt a proactive approach to cybersecurity. Once hackers have gained access to your company, it can be difficult to reduce the damage. Every channel must be protected, including email.
Ransomware is still being delivered via email by cybercriminals, who continue to develop sophisticated methods. Advanced email security solutions should use dynamic scanning that is fast and efficient. Security solutions should be able to detect threats hidden deep within content.
Conclusion
Ransomware can cause financial damage to businesses in many ways. These include ransom fees, downtime costs and labor costs. It is important for organizations to examine their cybersecurity defenses holistically. Ransomware attacks can be mitigated by identifying and managing potential risks and channels such as email and cloud collaboration tools.
