The average cost of a data breach in 2022 reached a high of $4.35 million, according to a report by IBM and the Ponemon institute. And many experts estimate that average cost could reach $5 million in 2023! The frequency and severity of ransomware attacks are rising – and organizations need to be shoring up their cybersecurity posture proactively or risk facing serious costs (and consequences).

So, what is ransomware?

The cost of ransomware

Ransomware is a type of malware that encrypts files and information on victims’ systems and prevents access until a “ransom” is paid. Also, common and especially vindictive among ransomware attackers today is an additional exploitation method known as “double extortion.”

Essentially, after attackers have gained access to an organization, found sensitive data and exported it to their own systems, they not only encrypt victims’ systems to elicit ransom payments, but they also threaten to leak stolen information publicly until ransom demands are met. Groups like ‘RA Group’ are known to employ double extortion methods – launching data leak sites on the dark web to publish victims’ details to incentivize victim organizations to pay up even faster.

As attackers evolve their methodologies to become even more effective, the true costs of a data breach are only rising – and it’s more than just financial stability that’s at stake.

What Else Is At Risk?

Losses in customer trust: On average, customers’ trust in a company declined by more than 67% after a data breach, according to research from Security.org. Additionally, after the massive Cambridge Analytica scandal in 2018, consumer trust in Facebook dropped 66% – from 79% in 2017 to 27% in just the first week after the scandal news broke. What’s worse, by the end of that year, over 40% of users aged 18-29 had removed Facebook from their phones.

Reputational damage: Analyst firm Gartner predicts that by 2024, 75% of CEOs will be held personally liable for cyber-physical security incidents, and CISOs are increasingly being held to fire when devastating cyber incidents occur. One report found that 62% of CISOs are worried that when a breach occurs, they’ll be held personally accountable – which has contributed immensely to a larger issue of widespread CISO burnout, with some dubbing the vicious cycle “The Great CISO Resignation”.

Lost downtime: Research shows that recovering from a ransomware attack is generally 10 times the size of the initial ransom payment. Following an attack, the average downtime a company experiences is 7-21 days. That means that even after an initial attack occurs, for 1-3 weeks all business (and revenue) grinds to a halt. For many, downtime is the most expensive aspect of a ransomware incident.

Where Zero Trust can help

The reality of our hyperconnected world today is that ransomware attacks and data breaches are bound to happen. There’s simply no way to defend against all of the risks posed by legacy infrastructure, hybrid work and today’s dynamic threat landscape.

But organizations that proactively prepare for data breaches to happen, and “assume breach” ahead of time are much better positioned to maintain business operations and minimize financial fallout when cyberattacks do occur.

For example, organizations that have adopted Zero Trust Segmentation as part of their Zero Trust or cyber resilience strategies save an average of $20.1 million in application downtime when cyber incidents occur, avert 5 cyber disasters annually, and are able to accelerate 14 more digital and cloud transformation projects within a given year. Those are some big savings!

If organizations invest in shoring up their IT infrastructure and segmenting their IT environment proactively, not only will they be able to better detect, contain, and remediate threats before they can threaten the business, but they’re able to massively reduce the costs incurred by cyberattacks and other data breaches.

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