Ransom Recovery Costs In recent times, the economic burden of ransom recovery costs has surged drastically. While ransom payments are a significant portion of the financial strain, the ransom recovery costs after an attack are equally or even more demanding. The latest survey findings reveal that the average recovery cost has escalated to a staggering $2.73 million. This figure signifies an almost $1 million increment from the $1.82 million reported in 2023. Unmasking the Average Ransom Payment Demands Despite the skyrocketing recovery costs, the survey data from this year shows a slight reduction in ransomware attack rates. The figures indicate that 59% of organizations were victims of such attacks, marking a drop from the previous year’s 66%. However, this doesn’t mean that organizations can afford to let their guard down. Ransomware attacks continue to be a significant threat, especially to organizations with higher revenues. Even smaller organizations, with revenues of less than $10 million, are frequently targeted with almost half (47%) falling victim to ransomware in the past year. The survey further disclosed that a substantial 63% of ransom demands were for $1 million or more. A sizeable 30% of these demands exceeded the $5 million mark, suggesting that cybercriminals are increasingly seeking larger payoffs. Alarmingly, it’s not just the highest-revenue organizations that are bearing the brunt of these escalated ransom demands. Nearly 46% of organizations with revenues of less than $50 million have received a ransom demand of seven figures in the last year. John Shier, field CTO, Sophos, voiced concern over the prevailing situation. He emphasized that the slight dip in attack rates should not lead to complacency. He pointed out that ransomware attacks are the most dominant threat today, fueling the cybercrime economy. He warned that the escalating costs of ransomware attacks are an equal opportunity crime, providing a lucrative avenue for cybercriminals of varying skill levels. The Root Cause: Exploited Vulnerabilities For two consecutive years, exploited vulnerabilities have been identified as the most common root cause of an attack, impacting 32% of organizations. This was followed closely by compromised credentials (29%) and malicious emails (23%). This trend is in line with recent incident response findings from Sophos’ most recent Active Adversary report. Organizations where the attack commenced with exploited vulnerabilities reported the most severe impact. They experienced a higher rate of backup compromise (75%), data encryption (67%) and a greater propensity to pay the ransom (71%) than when attacks were initiated with compromised credentials. These organizations also faced significantly higher financial and operational impacts, with an average recovery cost of $3.58 million compared to $2.58 million when the attack originated from compromised credentials. Ransom Payments and the Role of Insurance When it comes to ransom payments, 24% of organizations that decided to pay handed over the amount originally demanded. However, 44% of respondents managed to negotiate the ransom down, paying less than the initial demand. The average ransom payment tallied up to 94% of the initial demand. In most cases (82%), funding for the ransom payment came from multiple sources. The organizations themselves contributed 40% of the total ransom funding, while insurance providers accounted for 23%. The Growing Threat to Backups in Ransomware Attacks A staggering 94% of organizations targeted by ransomware in the past year reported that cybercriminals attempted to compromise their backups during the attack. This figure rose to 99% in state and local government organizations. In 57% of these instances, the attackers were successful in compromising the backups. Furthermore, in 32% of incidents where data was encrypted, data was also stolen, marking a slight increase from last year’s 30%. This trend intensifies the ability of attackers to extort money from their victims. Shier stressed the importance of managing risk and taking preventive measures. He urged businesses to critically assess their exposure to the most common root causes of ransomware attacks – exploited vulnerabilities and compromised credentials. He emphasized the need to impose costs on the attackers by raising the bar on what’s required to breach networks, thus maximizing their defensive spending. The State of Ransomware 2024 report is derived from a vendor-agnostic survey of 5,000 cybersecurity/IT leaders conducted between January and February 2024. The respondents were from 14 countries across the Americas, EMEA, and Asia Pacific. The surveyed organizations ranged from those with 100 to 5,000 employees, and their revenues varied from less than $10 million to over $5 billion. In conclusion, the rising costs of ransom recovery highlight the growing cyber threats that businesses face. Businesses must take proactive measures to protect their digital infrastructure, and this requires a comprehensive and robust cybersecurity strategy. While the costs associated with implementing effective cybersecurity measures may seem high, the potential damage and costs of a ransomware attack far outweigh these initial investments. At SpearTip, our ransomware threat assessment combines policy evaluation and technical testing, the team assesses vulnerabilities within your environment that could lead to ransomware attacks. You will receive actionable advice to adopt practices to mitigate and prevent these types of events. For all threat hunting engagements, we provide a review of policies and procedures, detection and protection capabilities, response protocols, and other relevant areas as observed, in addition to the findings from SpearTip’s agent-based deployment within your environment. You will receive actionable advice to adopt practices that mitigate these types of events. The ShadowSpear Platform is an integrable security solution with the combined capabilities of SIEM, AV, MDR, anti-phishing tools, and much more. Our SOC provides companies with a team of experienced professionals, 24/7/365 monitoring and threat remediation, and a proven cybersecurity tool dedicated to ensuring threat actors never establish a foothold in their environment.

If your company is experiencing a breach, call our Security Operations Center at 833.997.7327 to speak directly with an engineer.

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