Whitepaper: What CFOs Should Know about Ransomware

One of the most immediate concerns for Chief Financial Officers (CFOs) regarding ransomware attacks is the financial impact on the business. The ransom demands can range from thousands to tens of millions of dollars, and there are additional costs associated with incident response, legal counsel, and potentially even regulatory fines.

On average, a ransomware attack took 237 days to detect and 89 days to fully remediate (PDF). The annual impact from ransomware attacks in the US alone is estimated to be more than $20 billion dollars. Remediation costs following a ransomware attack average more than $4M per incident per each targeted organization.

This figure does not include additional incident response costs, tangential costs, damage to the brand, lost revenue, lost production from downed systems, and other collateral damage:

• Intellectual Property and Regulated Data Loss: After an attacker successfully executes their attack, they do not simply deny access to your data – they will send that data outside of your network and threaten to leak it publicly. For many organizations this exposure of customer data has regulatory implications and can lead to lawsuits and fines. Additionally, sensitive data on corporate transactions, patents, etc. can end up in the attackers' hands and be sold to the highest bidder on dark web forums.

• Incident Response and Remediation Costs: The average incident response cost for a ransomware attack is $4.54 million, more than the average cost of a data breach at $4.35 million. While larger organizations can absorb these costs, this potentially represents an existential threat to smaller companies.

• Tangential Costs to the Business: The above figures did not even include the ransom payment, the long-term damage to an organizations’ brand (loss of consumer trust), increased cyber insurance premiums, legal fees, or lost revenue which can far exceed remediation costs – this is why the focus needs to be on both prevention and resilience. These losses are nearly impossible for an organization to forecast and budget for, and in some cases can represent an existential crisis for smaller organizations.

According to the Ransomware and Data Extortion Business Risk Report, 62% of organizations hit by ransomware reported a major disruption in operations, with 38% saying operations were disrupted for at least two months to more than six months.

Moreover, paying the ransom is not guaranteed to result in data recovery. In fact, experts advise against paying ransoms, as it incentivizes the criminal enterprise and does not guarantee the safe return of your data.  

Current trends indicate that ransomware operators are taking advantage of the potential for multiple opportunities for revenue from an attack not only from the initial target, but potentially from partners, vendors, customers, and other third-party entities that could find themselves the victims of extorsion by way of data compromised in the initial attack.  

This further complicates the decision to pay a ransom, will the payoff mitigate the exposure to the extent required? CFOs must weigh all potential impact, financial losses, and costs associated with recovery against the decision to pay or not.

A CFO must ensure that financial resources are allocated appropriately to support cybersecurity initiatives while fostering a culture of risk awareness and fiscal responsibility. Here are several ways a CFO can address company culture in the context of ransomware threats:

• Align cybersecurity investments with business objectives: A CFO should ensure that cybersecurity investments are aligned with the organization's overall business objectives and risk appetite. This involves working closely with other C-level executives, IT, and security teams to identify, prioritize, and allocate resources to the most critical cybersecurity initiatives, including those focused on ransomware prevention and mitigation.

• Promote a risk-aware culture: A CFO should actively promote a risk-aware culture throughout the organization. This involves educating employees about the financial consequences of ransomware attacks, including the costs associated with downtime, data loss, and reputational damage. By helping employees understand the potential fiscal impact of ransomware attacks, they will be more likely to take cybersecurity seriously and adopt secure practices in their day-to-day work.

• Evaluate the need for cyber insurance: A CFO should assess the organization's need for cyber insurance, considering the potential costs associated with ransomware attacks and the organization's risk tolerance. Cyber insurance can provide additional financial protection and help the organization recover more quickly from a ransomware attack. By evaluating and, if necessary, investing in cyber insurance, a CFO demonstrates a commitment to managing the financial risks associated with ransomware.

• Monitor the effectiveness of cybersecurity investments: A CFO should regularly monitor and assess the effectiveness of cybersecurity investments, including those aimed at preventing and mitigating ransomware attacks. This can involve developing and tracking key performance indicators (KPIs) related to cybersecurity and adjusting investments as needed to maximize their impact.

• Collaborate with other C-level executives: A CFO should collaborate closely with other C-level executives, including the CEO, CIO, and CISO, to ensure a coordinated approach to addressing ransomware threats. By working together, these executives can develop comprehensive strategies that balance financial resources, risk management, and operational efficiency.

• Support employee training and awareness initiatives: A CFO should support and allocate resources for employee training and awareness initiatives related to ransomware threats. By investing in training, a CFO helps to create a culture where employees understand their role in preventing ransomware attacks and are equipped with the knowledge and skills to do so effectively.

In this reference guide, we explore what each C-level executive should know about ransomware in order to ensure a strong security posture and protect their organization.

DOWNLOAD THE WHITEPAPER HERE

As an executive, it is crucial to understand the potential impact of disruptive cyber-attacks on your business and take proactive steps to mitigate them.  

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Halcyon.ai is the leading anti-ransomware company. Global 2000 companies rely on the Halcyon platform to defeat ransomware with minimal business disruption through built-in bypass and evasion protection, key material capture, automated decryption, and data exfiltration and extortion prevention – talk to a Halcyon expert today to find out more. Halcyon also publishes a quarterly RaaS (Ransomware as a Service) and extortion group reference guide, Power Rankings: Ransomware Malicious Quartile, and check out the Recent Ransomware Attacks resource site.