Reputation Damage is a Consequence of Ransomware Too
Businesses need to be ready to handle a ransomware attack. Ransomware is the biggest cybersecurity threat that the world faces today, and attacks are only evolving to become more complex and more damaging. At a recent conference in Tel Aviv, U.K. National Cyber Security Centre (NCSC) CEO Lindy Cameron cautioned “Even with a war raging in Ukraine – the biggest global cyber threat we still face is ransomware. That tells you something of the scale of the problem.” The expert also cautioned that the sophisticated attacks that we’re seeing could potentially have a significant impact on nations and economies. Ransomware’s impact can be felt throughout a business causing more damage in more areas than you may expect.
Risk and Costs Are Rising
The pace and severity of ransomware attacks have been steadily rising in the last few years. According to Gartner, ransomware will have infected 75% of all enterprises by 2025. In 2020 and 2021, ransomware assaults more than doubled, increasing by 92.7% year-over-year. That means that every organization needs to strengthen its defenses against ransomware and be ready to face the possibility of an expensive, damaging attack. By 2031, the annual cost of ransomware damage is expected to reach $265 billion, with a ransomware attack targeting a firm every two seconds. This makes ransomware the fastest-growing type of cybercrime.
In a recent survey of IT professionals by Hitachi Vantara and Enterprise Strategy Group (ESG), researchers discovered that 79% of respondents reported that they’d navigated a ransomware attack at their company within the last year. Those attacks weren’t easy to handle and created a major drain on their organization’s resources, with an impact that reverberates throughout an organization, sending disruptive ripples into every department and the bottom line. An estimated 73% of those survey respondents report that their organizations were significantly financially or operationally impacted by these attacks.
Get Ready for a Severe Operational Impact
The operational impact of an attack can cost businesses a fortune all on its own without taking into account the expenses of incident response or any ransom paid. Lost productivity, delays in fulfilling customer requests, operational technology outages, production line shutdowns and more adverse outcomes of a ransomware attack can shut a company down, adding another layer of expense to the cake. Experts estimate that 25% of businesses that fall victim to a ransomware attack are forced to close temporarily due to the inability to operate. For many companies, any closure or loss of operational capacity, even for a few days is a major disaster. The average downtime from ransomware attacks increased from 15 days in Q1 2020 to 22 days in Q3 2021.
The amount of loss that an organization suffers from a ransomware attack has been steadily rising, making a big jump between 2020 and 2021 according to data gathered by the U.S. Federal Bureau of Investigation Internet Crime Complaint Center (FBI IC3). In 2021, both the number of complaints and the total losses associated with those complaints set new unwelcome records. IC3 received 3,729 complaints identified as ransomware in 2021, a whopping 51% increase over the 2474 recorded in 2020. Those incidents also cost victims a lot more money than in previous years. Ransomware victims suffered estimated losses of more than $49.2 million in 2021, a 69% increase over the already hefty $29 million recorded in 2020.
A Ransomware Attack Hits Multiple Environments
A ransomware infection doesn’t just impact a small section of a company’s IT environment. It bleeds out into many areas, snarling productivity and recovery at the same time. Which environments in an organization does ransomware impact? Storage systems and cloud-based data storage tops the list, hit in more than Storage systems or cloud-based data account for 79% of impacted environments in successful ransomware attacks, but other key elements that impact an organization’s ability to do business also take a hit when that organization is struck down by a ransomware attack.
Environments Impacted by a Ransomware Attack
Storage systems
Cloud-based data
Networks/connectivity
Key IT infrastructure
Data protection infrastructure
40%
39%
37%
36%
36%
Ransomware Delivers Reputation Damage Too
Unlike the classic song, businesses do care about their bad (or good) reputation. Building a strong brand and a positive brand reputation is hard work. Unfortunately, much of that hard work can be undone in a flash by a cyberattack. Getting hit by a successful cyberattack like a ransomware strike can be very damaging to a company’s brand and reputation. A report by IBM and Forbes Insights found that 46% of organizations that experienced a cybersecurity breach suffered a major hit to their reputation and their brand’s value as a result.
If a company that falls victim to a ransomware attack and suffers a data breach as a result serves consumers, the hit that a cyberattack can deliver to consumer sentiment becomes even more disastrous. In recent years, many consumers have become savvy about identity and data theft, making them very concerned about what companies do with their data. Most of them don’t think companies try hard enough to protect their data. An estimated 64% of consumers believe that companies aren’t doing enough to secure it. Consumers also do not tend to be forgiving of companies that can’t protect their information. One in four Americans says that they will not do business with a company that has had a data breach.
How Many Organizations Experienced Damage To Their Brand From Common Threats?
IT systems failure
Human error
IT security breach
Data loss from backup/restore failure
Natural or man-made disasters
Third-party security failure
66%
57%
46%
39%
23%
19%
A Strong Defense Against Ransomware Is Critical
Mounting a strong defense against threats like ransomware is essential for ensuring a company’s successful future. An estimated 60% of companies go out of business within six months of suffering a cyberattack. Put the right defenses in place now to stay out of that group.
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