What Kind of Financial Impact Can Ransomware Command?
Ransomware attacks have been a lucrative business model for criminals, with large payouts.
According to the 2023 Verizon Data Breach Investigations Report, the median cost per ransomware more than doubled over the past two years to $26,000, with 95% of incidents that experienced a loss costing between $1 and $2.25 million.
What is Ransomware?
Ransomware is a malware program that encrypts files on computer systems, making them unusable. Attackers typically threaten to either permanently lock down compromised systems or to release sensitive data, if a ransom is not paid.
- An increased attack surface, lack of security awareness, and poor cyber hygiene make many organizations an easy target.
- Improved encryption and the popularity of untraceable cryptocurrencies facilitate the execution of ransomware.
- Ransomware gangs often operate as organized crime, targeting certain countries or sectors.
- Ransomware-as-a-service (RaaS) models also help to propagate this type of attack.
The U.S. government considers ransomware a growing national security threat and has launched a series of initiatives to combat ransomware attacks, including the StopRansomware.gov website which provides education about how to prevent and mitigate ransomware attacks.
Cyber Ransom Payments Are Controversial
According to Gartner, “The percentage of nation-states passing legislation to regulate ransomware payments, fines, and negotiations will rise to 30 percent by the end of 2025, compared to less than one percent in 2021.” In the U.S., government organizations such as the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) advise victims to report the incidents to law enforcement and not pay ransoms. Still there were significant ransomware incidents impacting hundreds of organizations in 2023 including:
- The City Of Dallas
- Johnson Controls
- Las Vegas MGM Resorts
High-profile cases make the headlines, but cyberattacks on small businesses account for about 75% of all ransomware incidents, according to the U.S. Department of Justice (DOJ).
Ransomware Costs Are on the Rise
By 2031, ransomware costs will reach $265 billion annually. But the financial damage of ransomware are only part of the picture; it can also cause reputational and operational damage, including:
- Downtime and operational disruption
- Legal settlements and high insurance costs
- Loss of trust from investors, clients, and employees
How to Prevent Ransomware Attacks
No organization is immune to cyberattacks, but every organization can take steps to strengthen their defenses to minimize the risks, including:
- Get complete visibility into your environment through comprehensive asset discovery and inventory.
- Continuously monitor traffic on your network to detect any anomalies in asset or user behavior.
- Implement Zero Trust policies and network segmentation.
- Automate policy enforcement to secure your data and halt attacks.
- Promote cybersecurity best practices such as multifactor authentication and patch management.
- Have a plan in place for quick response in case of a ransomware attack.