These days, it seems that half of the online business management revolves around cybersecurity, and for good reason. Malware attacks and ransomware threats are expensive, time-consuming, and can even lead to bankruptcy in isolated scenarios.
Indeed, there are several costly ransomware threats to business that enterprise executives may be unaware of. Let’s break down some of these threats in detail so you can grasp the full danger that even a single successful ransomware attack may pose to your company.
The Ransomware Payment Itself
Naturally, any ransomware attack will include a ransom payment by its very nature. Most ransomware attacks are unreported and many enterprises are advised not to accept any demands. But plenty of firms do so regardless. Some estimates indicate that average ransomware payouts are over $300,000.
Some enterprises may have no choice when paying a ransom fee. If sensitive company data is on the line, they might not have enough time to come up with an alternative solution if they want to prevent sensitive information from leaking to the public. This could include customers’ credit card numbers or other identifying information.
In this way, ransomware attacks may cost a business money twice: first when the business pays the ransom fee, and another time when the business repairs any damage done by an attack.
Downtime and Disruption
In addition to the cost of the ransom payment, ransomware also typically costs companies thousands of dollars at minimum from disruption and downtime. When a company’s website or database goes down, it impacts its customers, their operations, and more.
In short, it tanks productivity and may have downstream effects for weeks, months, or even years to come. The cost of downtime is sometimes estimated to be much higher than the cost of even the most exorbitant ransom demands.
For example, an international currency exchange named Travelex was attacked by ransomware. The costs of disruption were so great that the company later had to file for bankruptcy.
Downtime to company services or websites costs more than money as well. Many online consumers don’t have any patience for websites that crash. In this way, companies may lose cash that they would otherwise receive as revenue when their customers go to their competitors or stop patronizing their online establishments.
Data Loss (and Fees)
In this day and age, enterprises that do online or international business must be very careful about their data security. Not only is it important for their operations, but it’s also crucial for the safety and security of their customers.
Data loss can take a heavy financial toll on ransomware attack victims. Some estimates indicate that 90% of ransomware attack victims don’t get all their data back, even if they pay the ransom fee.
If customer data is compromised, it can also lead to legal injunctions, particularly in light of legislation like the GDPR and CCPA. These fees can be quite exorbitant, just like ransom demands themselves.
Even after fees are paid, companies may be forced to undertake additional cybersecurity practices, adjust their procedures and policies, and implement other expensive fixes by legal mandate. All of those requirements can add up quite quickly, especially if a company’s security was subpar beforehand.
All told, the complete cost of data loss and security breaches can’t be fully tallied. In some cases, companies may lose the trust of their customers so much that they have no choice but to go out of business.
Forensics and Recovery
Enterprises must also consider the costs for forensic investigations and recovery when tallying the total cost of a ransomware attack. No company wants to be hit by the same attack twice, which means in-depth investigations are always required.
It often means hiring detailed cyber forensics specialists, leveraging certain types of expensive software, or shutting down company operations for some time while the investigation proceeds. Such adjustments may also cost the company in terms of productivity and customer loyalty, leading to further losses down the road.
Furthermore, recovery efforts, even when disaster recovery or business continuity plans are in place, can still cost hundreds of thousands or millions of dollars. Depending on the quality of forensic equipment and processes used, the investigation alone can cost tens of thousands of dollars.
Infrastructure Repair and Recovery
Some ransomware attacks incur additional costs in the form of broken or damaged infrastructure, such as decimated servers, irreparable platforms, and more. On top of that, you’ll have to purchase or rent infrastructure to recover after a ransomware attack, costing you more money in the short term.
Furthermore, in the immediate aftermath of a ransomware attack, many companies find that their cybersecurity insurance premiums have skyrocketed. They may choose to purchase additional infrastructure and security measures to prevent the same attack from happening again.
All these factors don’t even touch the potential reputational losses an enterprise may face when they are the victim of a ransomware attack. Even a single attack is enough to shatter the public’s perception of a company being safe and secure, especially if the public stores a lot of sensitive financial or personal information on their servers.
International customers, B2B clients, and other involved parties may simply stop doing business with an enterprise if they discover that it was the victim of a preventable ransomware attack. Even if the attack wasn’t preventable or was novel, the reputational losses are often impossible to stem.
Where Does That Leave Businesses?
Ultimately, no company wants to be the victim of a ransomware attack. That’s why high-quality IT security and managed IT services are more important than ever before.
When it comes to IT security in Long Island, look no further than LI TECH. As experienced data protection specialists, we offer a number of cloud management services, ranging from data protection cloud services to cloud infrastructure services and more.
We follow all the cybersecurity best practices for securing a cloud environment and put the safety and peace of mind of our clients at the forefront of each operation. Contact us today for more information.