Businesses that are hit by ransomware attacks often suffer collateral revenue damage far greater than the ransom or whether they pay it. The financial impact can be far-reaching and extend beyond the ransom.
Payment
Experts recommend that ransoms should not be paid by companies because it provides cybercriminals with a reason to continue. Companies that do pay ransom are often disappointed.
- The data they have recovered is corrupted.
- The attackers want more money.
- The attackers disappear, but they don’t retrieve their data.
Recent studies by Sophos, Pao Alto have shown that ransomware attacks cost an average of $570,000 to $812,000.
Cybercriminals are now using asymmetric encryption methods to decrypt data. If you don’t wish to pay the ransom you will have to either retrieve the data from backups and replicas, or you may lose the data altogether.
If you are the victim of a ransomware infection, it is better not to lose your data and to implement your incident response plan. A well-designed recovery plan can help you recover your data without much disruption and avoid paying ransom. A recovery plan generally includes five steps: assess mitigation, respond, communicate and retrospect.
It’s better to avoid the severe damage that ransomware attacks can cause than to attempt to repair it. Perception Point has more information about reducing the likelihood of being a ransomware victim.
Downtime Labor costs
You will experience financial losses if your systems go down. Data recovery can take up to a week for most companies. Without it, your entire operation could be crippled. It is vital to manage a business smoothly. Without it, it will be difficult to sell products and service clients. Downtime can lead to productivity losses of up 20%.
A ransomware attack in 2021, the Kaseya attack affected approximately 1,500 managed services provider customers. This is a clear example of how supply chain attack can cause greater damage than single attacks.
IT departments are often required to work overtime in order restore systems. Organizations can also experience a backlog due to lack of data access. To resolve data problems, additional consulting or specialist support may need to be provided.
How to build brand recognition
A damaged brand reputation can be difficult to repair and can have significant financial consequences. A data breach can cause negative publicity that affects customers, employees, investors, and all other stakeholders. The National Cyber Security Alliance research shows that 60% of small- and medium-sized businesses are shut down within six months of a data breach.
Expenses
Cybercriminals are becoming more likely to try to expose sensitive data they have obtained before encryption. Cybercriminals can cause severe harm to data that is mission-critical, such as hospitals, government agencies, and emergency call centers.
In certain industries, clients may be eligible for direct compensation in the event of a data breach. Scripps Health, Target retail giant, and Colonial Pipeline gas company are just a few examples of companies that have been the subject of class-action lawsuits.
Most cases are settled outside of court because companies don’t wish to be involved in lengthy court battles. Personal health information, financial information such as credit card details and financial information can all be leaked and subject to high regulatory and legal fines.
Loss of data and collateral damage
Ransomware can cause you to lose all your data. Data loss can cost hundreds of hours. Even if files can be restored from backups, there are still chances that they weren’t backed up correctly or completely. Ransomware attacks backup systems today, so data cannot be restored.
You’ll need to discover how cybercriminals gained entry to your systems. You have many options. They could send out phishing emails, set up fake websites, or directly attack software vulnerabilities.
Infected systems may need to be completely re-formatted and new software installed. Additional protection will be required to prevent data breaches in the future.
With inflation and recession, the ransomware attack could cause significant financial problems in. According to different reports, the average cost for cleaning up after a ransomware attacks could run up to $1.85million in 2020. There is a risk that another attack could occur if you don’t take steps to clean up your data, and correct any underlying issues.
Preventing ransomware attacks
- Ransomware attacks are prevented by having strong configuration management, employee training, and security systems in place.
- It is essential to stay current with all the latest operating systems.
- As they can be used to help you recover data, make sure you have up-to date backups.
- Maintain your computer systems current and apply security patches.
- Always ensure security is checked to ensure that you have the proper measures in place.
IT professionals must adopt a preventative approach because hackers can easily gain access to your organization. It is important to secure every channel, email being the most vulnerable.
Cybercriminals are continuing to employ sophisticated methods to send ransomware via email. Advanced email security solutions must use dynamic scanning, which is fast and effective. You should also be able detect hidden threats within the content.
Conclusion
Ransomware can have a number of financial consequences for businesses, including ransom payments, downtime, labor costs, reputational damage, and legal fees. Companies need to look at all aspects of their cybersecurity defenses.
