Report: Phishing Still Major Cause of Ransomware As Average Costs Reach $400K

Ransomware operators are as determined as ever to penetrate networks and hold data hostage for six-figure payments despite companies boosting their network defenses, and costs of a ransomware attack are increasing as a result, according to a new report.

Cloudian, an enterprise data storage company and provider of backup solutions, recently released a report that finds that despite organizations conducting anti-phishing training, the attack method remains one of the easiest point of entry for attackers, with 24% of ransomware attacks starting this way.

It appears that IT departments may need to do a better job of cybersecurity training as 65% of organizations that said ransomware was deployed on their network via a phishing attack had conducted anti-phishing training for employees.

Despite other countermeasures, ransomware still found its way into corporate networks, as 49% of ransomware victims said they had perimeter defenses in place prior to the attack.

The report also shed light on the speed with which ransomware attackers operate, with 86% of respondents saying attackers were able to take control of their data and hold it for ransom within 24 hours, and 56% said it happened within 12 hours.

However, ransomware operators that deployed the malware after a successful phishing attack were faster, as 76% of victims of a phishing-led ransomware attack said it took the criminals 12 hours or less to take control of their data.

Perhaps the most alarming part of the report was about how much a ransomware attack actually costs an organization, with the average ransom paid by victim organizations at $223,000, and 14% of victims paid at least $500,000.

However, organizations that chose to pay a ransom (55% of ransomware victims did, according to Cloudian) still end up paying an average of an additional $183,000. However, only 57% of respondents got all their data back despite shelling out an average of $406,000 for the ransom and related costs.

Many in IT are also urging cyber insurance, but insurers are only covering about 60% of the cost of ransomware, according to Cloudian’s report. For companies that had cyber insurance, 88% had their rates increased by an average of 25% after the attack.

The report also suggests that every part of an organization is at risk of a ransomware attack, with employees, finances, operations, customers and reputation all at stake and organizations reporting at least a “significant impact” on all of those aspects.

Cloudian ended its report by calling on organizations to invest in immutable data backups, but this is more than just a sales pitch. In fact, the company is right. If your data is properly and securely backed up, you should be able to recover from a ransomware attack within just a few days while saving possibly hundreds of thousands of dollars.

Editor’s note: A previous version of this article incorrectly stated that Cloudian’s report found phishing was the most common intrusion vector for ransomware. In fact, the most common intrusion vector was the public cloud.

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