Ransomware is one of the most dangerous threats to a company holding a lot of sensitive data. These sophisticated viruses can infiltrate servers and databanks and hold data for ransom, disrupting systems in the process. These attacks can be costly in several ways. The following 10 factors were cited in a survey by Infrascale about the impact of ransomware on organizations. Those businesses ranged from healthcare providers and financial institutions to those working in government and retail sectors.
10 Ways Ransomware Attacks Affect Businesses
1) Security Measures
The first thing companies need to consider, and the most influential after an attack, is a review of security measures. Clearly, there was something wrong with the system in place if this ransomware was able to get through and cause a data breach. The next step is to perform an audit of the system, find out where the weak points are, and work to fix them or replace them. This means some immediate changes to the software, such as updates or new antivirus models, and a new prevention plan.
2) Prevention Strategies
At the same time as boosting security measures, affected companies can work on more substantial prevention strategies to stop this from happening again. These plans can include new ways to store data, the use of backup systems for effective data recovery, and improved training for staff. That training can be as simple as teaching staff to recognize fraudulent emails, and that’s where email filtering tools are also a good idea. You may also decide to change the access controls for staff.
3) Operational Disruption
Operational shutdown during an attack can be catastrophic. However, there’s also the aftermath of an attack to deal with. In many cases, staff will end up dealing with the fallout of the ransomware attack rather than their normal role. Customer service may handle the complaints and correspondence, IT will keep working on solutions for security and prevention, and the finance department will see how the attack and subsequent expenses affect the books. Meanwhile, management teams will look at ways to come out of the situation as unscathed as possible.
4) Employee Productivity
A knock-on effect of all of this is employee productivity. Some workers will put in as much time and effort to fix the problem while neglecting other projects. They may end up neglecting other customers and their needs for a while, too, as those with data breaches become the priority. There’s also the fact that a data breach like this could have an impact on employee morale and confidence, leading to a decline in productivity and standards.
5) Data Loss
The end goal of these ransomware attacks is data loss. Direct attacks on systems can result in some serious data breaches without the right security and prevention measures in place. Disruptions to services and human error in fighting the problem could also be detrimental. The data loss will depend on the type of organization targeted. In many cases, the attack focuses on customer data and financial information. Health records are also targeted at medical centers.
Further Infrascale statistics about ransomware attacks show how data loss is much more common with servers and databases than anywhere else. 25.4% and 25.1% of responders mentioned these issues, respectively. Meanwhile, only 7.5% reported issues with backup systems and 6.2% with cloud services. This highlights the importance of working with experienced teams for cloud-based storage and data backups in case of an emergency.
6) Loss Of Trust
Understandably, when you have a significant breach of personal customer data, you’re going to lose the trust of all those customers affected. Even if they’re a long-term client who has had no issues with you in the past, this one moment could be enough for them to leave. They may focus on the lack of security measures in place or the inefficiency of the company’s response and feel the trust has gone. Similarly, those whose data was safe may wonder if it’s worth staying in case there’s another attack.
7) Reputation Damage
On top of this loss of trust from consumers, there’s the broader issue of the company’s reputation. Ransomware attacks aren’t something you can stay quiet about. You have to inform those affected, and any one of those victims could go public with the information. There could be a damaging ripple effect as prospective clients distance themselves from your operation.
8) Legal Consequences
A bigger concern regarding those affected customers, especially those with serious breaches of personal, financial, and confidential information, is the threat of legal action. If they suffered due to your negligence in failing to secure their data, or there was a clear breach of contract, they may try to sue. If multiple clients attempt this, it could be costly. Companies can bring in their legal teams to negotiate settlements and handle contract disputes as best they can. The hard part is doing this in a way that restores trust and reputations without being too costly.
9) Insurance Claims
Meanwhile, companies dealing with ransomware attacks may also find themselves dealing with insurance claims. These claims can help organizations reclaim some losses and the costs of damage control, new software, investigations, and legal fees. Again, this is where working with a respected data protection company can help. You get a much broader safety net for peace of mind.
10) Financial Implications
Whatever the extent of a ransomware attack and however badly clients respond to the data breach, there are going to be financial implications. You may be lucky and find that most people are forgiving enough not to make claims and that you can recover your losses relatively quickly. Still, the short-term financial losses and loss of business could be damaging.
Don’t Get Caught Out
The takeaway from all this is that the more prepared you are for a ransomware attack, the better your chance of avoiding those losses in earnings, productivity, and customer trust. Upgrade your security, work with a company that provides secure data backups and recovery, and train your staff. Get a strong preparation plan in place for the worst-case scenario.
