Most Companies Break Their ‘Do Not Pay’ Policies by Paying Millions in Ransoms: Cohesity

Research commissioned by Cohesity has revealed that today’s pervasive cyberattacks are forcing the majority of companies to pay ransoms and break their ‘do not pay’ policies, with data recovery deficiencies compounding the problem. The research polled from over 900 IT and Security decision-makers shows that companies firmly operate in a ‘when’, not ‘if’, reality of cyberattacks. In fact, most companies have paid a ransom in the last two years, and the vast majority expect the threat of cyberattacks to increase significantly in 2024 compared to 2023.

Alarmingly, close to 8 in 10 (79%) respondents said their company had been the ‘victim of a ransomware attack’ between June and December. The cyber threat landscape is expected to get even worse in 2024, with 96% of respondents saying the threat of cyberattacks to their industry will increase this year and over 7 in 10 (71%) predicting it will increase by more than 50%.

Organizations’ attack surfaces are informed by the size and scope of their data environments. However, 78% of respondents said their data security risk has now increased faster than the growth in the data they manage. Respondents also believe organizations’ cyber resilience and data security strategies are not keeping up with the current threat landscape, with just 21% having full confidence in their company’s cyber resilience strategy and its ability to ‘address today’s escalating cyber challenges and threats’.1

Slow Data Recovery & Lack of Cyber Resilience Results Ransom Payments

Cyber resilience is the technology backbone for business continuity. It defines companies’ ability to recover their data and restore business processes when they suffer a cyberattack or adverse IT event. However, according to respondents, every company has cyber resilience and business continuity challenges:

  • All respondents said they need over 24 hours to recover data and restore business processes
  • Just 7% said their company could recover data and restore business processes within 1-3 days
  • 35% said they could recover and restore in 4 to 6 days, while 34% need 1-2 weeks
  • Alarmingly, almost 1 in 4 (23%) need over 3 weeks to recover data and restore business processes

Further demonstrating cyber resilience gaps, just 12% said their company had stress-tested their data security, data management, and data recovery processes or solutions in the six months prior to being surveyed, and 46% had not tested their processes or solutions in over 12 months.

Unsurprisingly, 94% of respondents said their company would pay a ransom to recover data and restore business processes, while 5% said ‘maybe, depending on the ransom amount.’ More than 2 in 3 (67%) said their company would be willing to pay over $3 million to recover data and restore business processes, with 35% of respondents saying their company would be willing to pay over $5 million. The research also showed the importance of being able to respond and recover, as 9 in 10 said their organization had paid a ransom in the prior two years, despite 84% saying their company had a ‘do not pay’ policy.

“Organizations can’t control the increasing volume, frequency, or sophistication of cyberattacks such as ransomware. What they can control is their cyber resilience, which is the ability to rapidly respond and recover from cyberattacks or IT failures by adopting modern data security capabilities,” said Brian Spanswick, chief information security officer and head of IT, Cohesity. “It is no surprise that the majority of companies have been hit by cyberattacks like ransomware. What is alarming is that 90% have paid a ransom, breaking their ‘do not pay’ policies, and most are willing to pay over $3 million in ransoms because they can’t recover their data and restore business processes or do so fast enough.”

Executive Management Should Be Accountable & Aligned

Respondents identified executive awareness and responsibility for data security as two areas for companies to improve, with just 35% saying their senior and executive management fully understands the ‘serious risks and daily challenges of protecting, securing, managing, backing up, and recovering data.’ Four in five said executive management (C-Level) and boards should share the responsibility for their company’s data security strategy, while 67% said their company’s CIO and CISO, in particular, could be better aligned.

Prioritizing their biggest concerns about a successful data breach or cyberattack, respondents selected brand and reputational damage (34%), a drop in share price / investment / profitability (31%), a direct hit to revenue (30%), and a loss of stakeholder trust (30%). When asked who is most impacted by a data breach or cyberattack, respondents said existing customers (29%), the Security team (29%), the IT team (28%), employees (28%), and their third-party partners (27%) were most impacted.

“Cyber resilience and data security should be a holistic organizational priority because the use of data and technology occurs in every function by every employee. The severe impact of a successful cyberattack or data breach on business continuity, revenue, brand reputation, and trust is enough to keep all business, IT, and Security leaders awake at night,” said Sanjay Poonen, CEO and president of Cohesity. “To rapidly respond to cyberattacks, organizations need modern AI-powered data security and management solutions that protect their data, detect when it is under attack, and recover it as fast as possible to restore their business processes.”