At $2 mn-plus, manufacturing sector paid the biggest ransom after cyberattacks | The Financial Express

At $2 mn-plus, manufacturing sector paid the biggest ransom after cyberattacks

Over half (57%) of manufacturing and production organisations hit by ransomware reported that cybercriminals encrypted their data.

At $2 mn-plus, manufacturing sector paid the biggest ransom after cyberattacks
Once encrypted, the data becomes extremely hard to retrieve and may be lost forever. (IE)

The manufacturing and production sector paid the highest amount of ransom, a whopping average of $2.03 million, following cyberattacks around the world in 2021, revealed a just-released report by cybersecurity solutions firm Sophos. This was more than double the cross-sector average of $812,360.

The report, ‘The State of Ransomware in Manufacturing and Production, 2022’, revealed that even though manufacturing had the lowest ransomware attack rate, tied with financial services, at 55%, it was still considerably higher than the 36% reported in 2020. “The impact of ransomware affects organisations far beyond encrypted databases and devices,” the report said, stating that operations of around 77% of the over-400 manufacturing firms surveyed were impacted following attacks. Moreover, 71% said that the incidents caused their organisations to lose business/revenue.

Though these numbers were lower than the cross-sector averages (90% and 86%, respectively), experts said that the trend was concerning.

“Manufacturing is an attractive sector to target for cybercriminals due to the privileged position it occupies in the supply chain. The convergence of information technology (IT) and operational technology (OT) is increasing the attack surface and exacerbating an already complex threat environment,” said John Shier, senior security advisor, Sophos.

Also read: Yes Bank profit falls 32% on higher provisioning

Over half (57%) of manufacturing and production organisations hit by ransomware reported that cybercriminals encrypted their data. Once encrypted, the data becomes extremely hard to retrieve and may be lost forever. Here, the sector performed better than others when it comes to stopping encryption. Around 38% of respondents said that they were able to stop an attack before data could be encrypted – better than the cross-sector average of 31%.

“This may be a positive result of changes that organisations in this sector made to improve their cyber insurance positions, such as implementing new technologies, increasing staff training, and changing processes,” Sophos noted in its report.

The report also noted that in the aftermath of an attack, manufacturing firms used a variety of methods to get their data back, with over 96% managing to retrieve some amount. While 33% paid the ransom (which is notably the lowest among all sectors, versus the cross-sector average of 46%), 58% used back-ups, and 48% used “other means” (total does not amount to 100 as many used multiple methods at once).

Also read: Punjab National Bank raises FY23 credit growth prediction

“Manufacturing and production organisations reported the lowest level of backup use across all sectors, with just 58% of respondents using this approach. This is a concerning finding as backups are essential for recovery from ransomware and many other incidents,” the report stated.

To further reduce risks, only 75% of the sector’s firms chose to take cyber insurance coverage, Sophos revealed. This was the lowest among all sectors, with the cross-sector average being 83%.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 04-11-2022 at 01:15 IST