The Threat of Ransomware: A Deep Dive Into Its Impact

When an organization is hit with ransomware, it takes a big financial hit. It loses revenue during a period it is offline and then pays for remediation.

Cybercriminals use vulnerabilities in computer systems to gain unauthorized access, allowing them to encrypt files. The attacker then demands money for the decryption key to unlock the file.

Disruption of Critical Infrastructure

What is ransomware? Ransomware is malware that encrypts files and systems on local and network storage, forcing businesses to pay a ransom to recover access. Hackers develop this type of malware to make money through digital extortion. Other types of malware may steal or delete data, but ransomware encrypts it, making the data unusable unless a backup is available. Some versions of ransomware also spread to other devices.

The Department of Justice recently unsealed two indictments against a cybercriminal who used three different ransomware variants to attack victims, including law enforcement agencies and critical infrastructure organizations. The indictments show that ransomware continues to threaten the Nation’s state, local, tribal, and territorial (SLTT) government entities and critical infrastructure industries.

Many of these attacks are caused by phishing, so organizations must continue to focus on user awareness and education to prevent users from clicking on malicious links or attachments. Additionally, organizations should have a clear and well-rehearsed incident response plan to mitigate damage, notify stakeholders, and initiate recovery procedures in the event of an attack.

Additionally, organizations should regularly update software and operating systems to reduce vulnerabilities. Lastly, segmentation can protect critical systems by separating them from general access points. This will ensure that if one part of the system is compromised, attackers cannot use it to access sensitive information or infect other systems.

Economic Impact

While cyber insurance may help mitigate the costs of a ransomware attack, it’s not a foolproof defense. Many cybercriminals are highly skilled and adaptable.

 The latest ransomware variants have shifted from encryption-only practices to threats, extortion, and theft. A particularly troubling trend is the use of malware to steal sensitive data that could be sold or published online if a ransom demand is not met. This double or triple extortion further reduces the perceived return on investment for ransom payments.

Ransomware operators also gain leverage by encrypting data that can’t easily be unlocked, like system files or data stored in firewall log buffers. A successful attack seems inevitable, leading victims to give in to hackers’ demands.

Moreover, the risk of prosecution is low for ransomware attackers, which allows them to organize themselves with staff structures and processes similar to modern businesses. This helps them make business decisions and plan attacks.

Impact on Leadership

The earliest ransomware variants encrypt data and systems, preventing users from accessing files and devices until attackers receive a ransom payment. When victims had regular backups, they were often able to restore their data without paying a ransom. However, attackers evolved their tactics and started to target backups as well. A 2023 study by Veeam found that 93% of ransomware attacks targeted backups.

Attackers also began to require payments in the form of cryptocurrency. This makes it difficult for victims to trace payments and helps criminals remain anonymous. Additionally, some attackers have demanded payments in the form of Apple iTunes gift cards to prevent them from being reported to authorities.

CISOs and other cybersecurity leaders must prepare for the heightened risk of ransomware incidents. They should have a team that includes legal counsel, forensics investigators, professional negotiators, and cybersecurity insurance providers to ensure the organization is well-prepared to respond.

Security professionals must communicate with their business colleagues about the ransomware threat and how to best mitigate it. The best way to do this is to engage with executives and share threat information regularly. This will help them understand how a ransomware attack could impact their reputation, client relationships, and company valuation.

Psychological Impact

It’s easy to understand why ransomware is so lucrative for cybercriminals. The financial impact of an attack is often the focus of attention and discussion, and rightly so:

• Ransom payments.
• Business interruption costs.
• Privacy liability expenses.
• Hiring incident response firms and negotiators can quickly add up.

However, the social and psychological costs of a successful ransomware attack may need to be reported or underestimated. For example, when a ransomware attack disrupts critical services like healthcare and government, citizens lose confidence in those institutions and the ability of law enforcement to protect them.

In addition, the fear of data loss and disruption can lead to changes in digital device usage habits. As a result, victims might start using more secure passwords or installing antivirus software on their devices. Moreover, a study found that people who have experienced a ransomware attack tend to become more cautious and aware of the risks associated with digital device security.

Moreover, the feeling of powerlessness can be highly distressing for victims. Researchers asked ransomware victims to rate their feelings post-victimization and discovered that the majority of respondents reported feeling angry, with anxiety and distress being close behind. These feelings can be especially acute if the ransomware is distributed via phishing email or drive-by downloading, a common vector for ransomware infection.

About The Author