Ransomware is one of the most devastating cyberthreats businesses face today. It can cause irreparable damage to a company’s systems, data, and reputation, and the financial harm can be severe.
The cost of a ransomware attack can vary widely based on several factors, including the size of the organization, the duration of the attack, downtime, the value of the data that was encrypted or stolen, the ransom amount (if paid), and the subsequent costs of recovery, investigation, and mitigation. 75% of all ransomware attacks involve small businesses and 60% of those victims go out of business within 6 months. The true cost is not easy to quantify with just 42% of companies reporting a ransomware attack to both law enforcement and a cyber security incident response service.
The ransom demand itself, if paid, generally only accounts for a small proportion of the overall cost to the organisation often a little as 15%. The average cost per incident globally is expected to be in the region of $5 million in 2023.
Here are some components that contribute to the cost of a ransomware attack:
- Ransom Payment: Some organizations choose to pay the ransom to get their data back. However, paying the ransom doesn’t guarantee that the data will be returned or that it hasn’t been copied or sold. The ransom amount can range from a few hundred dollars for individuals to millions of dollars for large corporations. 80% of victims were hit for a second payment and subsequent payments thereafter.
- Downtime: Organizations may experience operational downtime during and after a ransomware attack, leading to lost revenue.
- Recovery: The costs associated with restoring systems and data can be significant, especially if backups are not available or are also compromised.
- Investigation: Hiring cybersecurity experts to investigate the breach can be expensive.
- Legal and Regulatory Costs: Organizations might face legal actions or regulatory fines, especially if personal data was compromised.
- Reputation Damage: A ransomware attack can damage an organization’s reputation with clients, customers, business partners and employees leading to lost business.
- Preventive Measures Post-Attack: After an attack, organizations often invest in enhanced cybersecurity measures, training, and infrastructure to prevent future incidents.
- Loss of Intellectual Property: In some cases, valuable intellectual property might be stolen, leading to long-term competitive disadvantages.
It’s also worth noting that the landscape of cyber threats, including ransomware, is constantly evolving. The frequency, sophistication, and cost of ransomware attacks have been on the rise in recent years. In addition, we now have the emerging threat of Extortionware to consider.
Organisations must seriously weight up the costs of enhancing their cybersecurity and redundancies to ensure business continuity or possibly of being attacked. With 68.5% of businesses worldwide victimised by ransomware in 2021 the choices are limited. Speak to one of the cybersecurity team at Archway Securities.
