5 Reasons Businesses Need to Protect Themselves From Ransomware Attacks
Emily Newton is the Editor-in-Chief of Revolutionized
, an online magazine showing how technology is disrupting many industries.
By Emily Newton,
Cybercrime is on the rise — and companies of all kinds may be at risk. Defending against ransomware may soon become a top priority across the business world.
Ransomware attacks by hackers use malicious software that locks files, holding them hostage until the targeted business pays a ransom. In addition to being potentially expensive, these attacks can cause significant damage in other ways.
Ransomware attacks use encryption to effectively lock down files. The information can’t be accessed without a secret key that only the hacker knows.
1. Ransomware Attacks Cause Weeks of Downtime
Businesses that don’t have backups ready and aren’t willing to pay the ransom will not be able to access their files. In some cases, it may take days or weeks to recover encrypted information — if at all. As a result, companies may face significant downtime while determining what options are available. On average, businesses lost 22 days to a ransomware attack in the third quarter of 2021. This number is increasing — the average company lost just 15 days in the first quarter of 2020.
As businesses come to depend more on digital solutions and devices that hackers can compromise, the average amount of downtime may rise even more.
Businesses that implement information security best practices but skimp on cybersecurity may be at risk. Cybersecurity includes securing devices and remote connections, unlike information security. Hackers take advantage of insecure devices and WFH connections, so most businesses need a combination of the two.
During those 22 days of downtime, much of a company’s staff won’t have access to the resources they need to do their work. IT and cybersecurity personnel will be extremely busy, dedicating most of their time to controlling the infection, taking stock of the damage and identifying options.
2. Responding to an Attack Costs Money
Companies may need to bring in outside consultants who can help manage the attack depending on the business’s size and team composition. Resolving the ransomware attack can become extremely expensive as a result, even without considering lost productivity and downtime.
Even if the ransom is paid, certain files may be lost for good. These lost files can make a ransomware attack extremely expensive, depending on the importance of this information. In some cases, paying the ransom may not decrypt files. Hackers can always take the money and run. The decryption tools hackers use also aren’t always well-designed. Even if they choose to release the information, certain key files may be corrupted or deleted in the process.
3. Locked Files Can Be Lost Forever
Necessary smart or IoT devices may be knocked offline by the attack — though good security practices can help keep these items safe even if a hacker compromises the network.
Companies may regain access to some or most of encrypted files, but they’ll still be at risk of losing critical information. Some data may be gone forever.
Businesses that aren’t ready for a ransomware attack often have no other option than to pay the ransom.
4. Ransoms Are Typically Expensive
The FBI and similar organizations recommend that businesses do not pay because this does not guarantee the return of encrypted data. However, many companies determine that the potential downtime and lost productivity would be a bigger loss than the ransom.
On average, these ransoms are expensive. The cheapest ones will be tens of thousands of dollars at the least — and the most expensive can be astronomical. One insurer reportedly paid $40 million to a hacker to secure data lost to a ransomware attack.
Cybercriminals are also becoming more demanding. The average ransom payment was $220,298 in the first quarter of 2021, up 43% from 2020. If ransomware continues to be profitable for cybercriminals and businesses that gather more data, ransoms are likely to rise as well.
Preparing for a ransomware attack can make recovering much easier. Effective backups allow businesses to restore key files without paying the ransom. Good cybersecurity practices will also help keep information safe from hackers.
Customers are more aware of cybercrime than ever. Market research shows that the average consumer wants to work with businesses that will keep their data safe.
5. A Successful Hack Can Damage a Company’s Reputation
Falling victim to a business ransomware attack can cause significant and lasting damage to a company’s reputation. One recent report found that 66% of businesses that fell victim to ransomware reported a steep fall in revenue following the attack. These operations tied the loss directly to reputation damage caused by the hack.
The business's location, size and industry had no real impact on this reputation damage — companies of all kinds found that ransomware attacks alienated their customers.
Organization leaders also found themselves affected by the business’s damaged reputation. About 32% of polled businesses said C-level employees were forced to leave the company or resign in the wake of a ransomware attack. In addition, 29% of operations were forced to lay off employees due to lost revenue or reputation damage.
Businesses of all kinds can fall victim to a ransomware attack, which can have significant consequences when successful. Forced downtime, lost productivity and a damaged reputation may cause serious problems.
How Businesses Can Prevent a Ransomware Attack
The right practices can make ransomware attacks much less likely to succeed. Backups, security training and safety tools can prevent hacks and limit their potential impact.
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