Costs of ransomware attacks on businesses

Ransomware can attack small and large businesses alike. A typical attack spreads through computer systems, encrypting crucial data and locking it out of use.

Following this is the demand for a payment, which, if completed, will buy the encryption keys to unlock the data — maybe. The costs can be enormous and long term. Being prepared and knowing the exact nature of this serious threat and the extent to which it can damage a business is crucial. These are the principle costs of ransomware attacks.

Downtime

Data is the lifeline for a business. When customer profiles, contact information, transactions, delivery schedules, correspondence, compliance records, and other sensitive data are not accessible, the results can be chaotic. For those businesses that are not adequately protected, this initial nightmare phase of a ransomware attack can bring operations to a standstill, idling employees. The cost of downtime is the reduced ability to function, and it can last for days, weeks, and even longer.

Damaged public image

When there is no way to communicate, it leaves customers in the dark. This, understandably, projects a poor image of the business. Despite the malicious nature of a ransomware attack, word can spread quickly of company troubles, oftentimes in the news and social media. Customer frustration can evolve into widespread criticism as to why the company wasn’t better prepared.

Lost or damaged business

Following failed or poor service, unintentional as it may be, some customers will simply not return. For some clients or customers, just one bad experience can send them shopping elsewhere. Sales can drop, negatively affecting profits and the bottom line.

Actual ransom payments

Paying the ransom will supposedly regain the victim’s access to their data. These payments can range from the hundreds to millions of pounds. For those companies that decide to pay the ransom, payment is no guarantee of regaining data. Criminals may not send the encryption keys, or the encryption keys may not work at all.

One reason ransomware attacks have been successful is the ease in which criminals can anonymously extract payments. The payments are made through cryptocurrencies, such as Bitcoin or other online services, and are nearly impossible for law enforcement to trace.

Remedial costs

Hiring IT experts to attempt data retrieval and recover files after the fact can be very expensive. Additionally, companies have to reconcile with their customers by fulfilling missed obligations. Sometimes, adding incentives or benefits will keep customers happy. Often, there are extra fees and other issues to deal with, as well. Returning to normal operations requires fixing all the problems.

Ongoing costs of prevention

Once a business, or other organization, has suffered a ransomware attack, it is very likely to be a target again, especially if it has already paid a ransom. This only increases the urgency with which a business needs to properly protect itself.

The costs of a business failing to protect itself against ransomware and other malware attacks can be staggering. With cybersecurity, a proactive approach of education and prevention can be cheap by comparison.