Beyond Ransoms: The Financial Impact of Ransomware Attacks

News about a ransomware attack typically starts with an attention-grabbing headline focusing on the amount of data stolen from the victim and how much they paid to get their data back. The headline dollar figure leaves out the actual and total cost of recovering from the ransomware attack from start to finish.

As of 2024, the average ransom payment made by organizations following ransomware attacks rose to approximately $2.73 million, marking an increase of nearly $1 million from the previous year. Notably, in early 2024, the Dark Angels ransomware group received a record payment of approximately $75 million from an undisclosed victim.  

Additionally, in February 2024, a major healthcare company paid a ransom of $22 million following a significant cyberattack that compromised the data of over 100 million individuals.  

Sadly, paying a ransom does not guarantee complete data recovery for victimized organizations. According to a 2021 report, while 32% of surveyed organizations opted to pay the ransom, only 8% managed to recover all their data, leaving 92% without complete restoration.  

Similarly, a 2023 survey revealed that 21% of organizations that paid the ransom were still unable to recover their data, highlighting the risks associated with relying on cybercriminals for data restoration. In addition to the actual ransom, victims face hard and soft costs when recovering from a ransomware attack.

The True Cost of a Ransomware Attack

‍Downtime and Business Interruption: Ransomware incidents often lead to significant operational halts that prevent employees from accessing critical systems and data. In 2023, the average downtime following a ransomware attack was 22 days, severely disrupting operations and resulting in millions in lost revenue. Extended downtime can also impact service-level agreements (SLAs), causing additional penalties and strained customer relationships.

Incident Response and Forensics: Engaging cybersecurity experts to investigate, contain, and mitigate the breach incurs notable expenses. The average ransomware attack cost was estimated at $1.85 million in 2023, much of which was attributed to technical response and forensic efforts. Organizations must also account for the time-sensitive nature of this work, which often requires around-the-clock efforts to limit further damage.

System Restoration and Data Recovery: Rebuilding IT infrastructure, reimaging machines, and restoring lost or corrupted data can be time-consuming and costly. In 2023, healthcare organizations faced the highest average cost of data breaches at $10.93 million, primarily driven by complex recovery needs. Even with backups, restoration efforts can take weeks and require specialized expertise to ensure data integrity and security.

Legal and Regulatory Fines: Failing to meet data protection obligations, such as under GDPR or HIPAA, can result in substantial fines following a ransomware breach. In 2023, 42% of companies reported that cyber insurance only covered a small fraction of damages, leaving them vulnerable to costly legal exposure. Class-action lawsuits, regulatory investigations, and breach notification obligations can significantly inflate legal costs.

Third-Party Services: Organizations often must hire external specialists for PR management, legal counsel, breach notification vendors, and incident negotiators. These services come at a premium and are typically not included in traditional insurance coverage, as highlighted by the 42% of companies that reported partial coverage in 2023. Failure to manage external communication properly can lead to further reputational and financial fallout.

Insurance Costs: Even organizations with cyber insurance face long-term consequences in the form of higher premiums or reduced coverage options. In 2023, many insured companies found that policies only covered a limited portion of their ransomware-related losses, forcing them to reevaluate risk strategies. As insurers adjust to increasing threat severity, many tighten payout conditions or drop coverage entirely.

Theft of Funds or Intellectual Property: Attackers frequently exfiltrate sensitive data or credentials, which can lead to direct monetary theft or long-term competitive disadvantages. In 2023, ransomware accounted for 27% of malware-related breaches, emphasizing its role in data theft and extortion. The exposure of trade secrets or proprietary research can impact market position and erode future growth opportunities.

Reputational Damage: Loss of trust among customers, investors, and partners can severely affect an organization’s public image and long-term viability. In 2023, 20% of ransomware-related costs were attributed to reputational damage, underscoring the high cost of rebuilding stakeholder confidence. News coverage and social media can amplify the negative impact, regardless of how well the technical response is handled.

Employee Productivity Loss: System unavailability and post-attack procedures often lead to significant reductions in workforce efficiency. In 2023, 35% of organizations experienced C-level resignations after ransomware events, a strong indicator of internal fallout and disrupted leadership. Employees also experience psychological stress and burnout, which can hinder recovery and increase turnover.

Customer Churn: Following a breach, customers—especially in industries like finance, healthcare, and e-commerce—may switch to competitors perceived as more secure. In 2023, 60% of organizations reported direct revenue losses due to customer departures after ransomware incidents. Churn also drives up customer acquisition costs as businesses scramble to replace lost accounts.

Operational Inefficiencies: Post-attack environments often require increased security controls and manual processes, slowing down day-to-day operations. In 2023, leadership disruptions were common, with 35% of firms reporting C-level exits, further complicating recovery and decision-making. Teams must also undergo new training and compliance audits, drawing attention away from core business functions.

Brand Devaluation: Publicly traded companies can experience rapid stock devaluation following a ransomware breach. In 2023, 53% of affected companies suffered brand damage, negatively impacting market perception and investor confidence. Recovery in stock value and brand reputation can take months—or even years—depending on the severity and public visibility of the breach.

Opportunity Cost: Resources diverted to incident response often delay key projects, partnerships, or product launches. In 2023, 33% of companies had to suspend operations entirely during ransomware recovery, illustrating the disruption to growth-oriented initiatives. These delays can allow competitors to gain market share or disrupt business momentum.

The Bottom Line

Ransom payments constitute a relatively small fraction of the total financial impact of ransomware attacks. According to a 2022 analysis, ransom payments typically account for about 15% of the overall costs associated with such incidents. The remaining 85% encompasses various expenses, including operational downtime, system restoration, legal fees, and reputational damage.  

For instance, in 2024, the average ransom payment was reported to be $2 million, reflecting a 500% increase from the previous year’s $400,000. However, excluding the ransom, the average recovery cost reached $2.73 million, nearly $1 million higher than the prior year’s $1.82 million. These figures highlight that the ransom is just a portion of the financial burden organizations face following such attacks:

• Average Cost of a Ransomware Attack: $2 million

• Average Days of Downtime: 24 days

• Average Days for Recovery: Over 280 days  

• % Organizations Not Recovering Data After Paying Ransom: 92%  

How to Avoid the True Costs of a Ransomware Attack

The Halcyon Anti-Ransomware Platform protects organizations from becoming ransomware victims, avoiding the hard and soft costs of ransomware attacks. With security capabilities built to frustrate attackers before, during, and even after an attack, organizations augmenting their security framework with Halcyon see a significant decrease in the risk of a harmful attack impacting their business.  

Since every Halcyon customer also benefits from the 24/7/365 threat monitoring service included with the product at no additional cost, security teams have more time to focus on other pressing security initiatives.  

How Halcyon Works

With the Halcyon lightweight agent deployed across an organization’s endpoints and servers, Halcyon will:

• Analyze all files and applications deemed “safe” by the EPP/EDR, looking specifically for ransomware payloads and precursors and blocking them from executing if found.

• Monitor activity on the endpoints and servers specifically for ransomware actor behaviors, and if found blocking them from proceeding with their attack.

• Detect and alert if data moves to known nefarious sites outside the network or if the volume of data exceeds a pre-set threshold.

• If ransomware encryption begins, it automatically captures the encryption key material, enabling the recovery of any impacted data without paying a ransom.  

Halcyon.ai eliminates the business impact of ransomware. Modern enterprises rely on Halcyon to prevent ransomware attacks, eradicating cybercriminals’ ability to encrypt systems, steal data, and extort companies – talk to a Halcyon expert today to find out more, and check out our quarterly RaaS and extortion group reference guide, Power Rankings: Ransomware Malicious Quartile.