Sophos, a global cybersecurity service, has released its annual State of Ransomware 2023 report, finding that in 76% of ransomware attacks against surveyed organisations, adversaries succeeded in encrypting data.

This is the highest rate of data encryption from ransomware since Sophos started issuing the report in 2020.

Sophos surveyed 3,000 cybersecurity and IT leaders across 14 different countries, from organisations with between 100 and 5,000 employees.

The survey shows that when organisations paid a ransom to get their data decrypted, they ended up additionally doubling their recovery costs ($750,000 in recovery costs versus $375,000 for organizations that used backups to get data back).

Moreover, paying the ransom usually meant longer recovery times, with 45% of those organisations that used backups recovering within a week, compared to 39% of those that paid the ransom.

Overall, 66% of the organisations surveyed were attacked by ransomware – the same percentage as the previous year – suggesting that the rate of ransomware attacks has remained stady, despite any percieved reduction in attacks.

Further, Sophos found that the UK faces the lowest level of attacks compared to the other countries they surveyed, with only 44% of UK organisations being hit in this past year, compared to 57% previously.

“Rates of encryption have returned to very high levels after a temporary dip during the pandemic, which is certainly concerning. Ransomware crews have been refining their methodologies of attack and accelerating their attacks to reduce the time for defenders to disrupt their schemes,” said Chester Wisniewski, field CTO, Sophos.

“Incident costs rise significantly when ransoms are paid. Most victims will not be able to recover all their files by simply buying the encryption keys; they must rebuild and recover from backups as well. Paying ransoms not only enriches criminals, but it also slows incident response and adds cost to an already devastatingly expensive situation,” said Wisniewski.

When analyzing the root cause of ransomware attacks, the most common was an exploited vulnerability (involved in 36% of cases), followed by compromised credentials (involved in 29% of cases).

This is in line with recent, in-the-field incident response findings from Sophos’ 2023 Active Adversary Report for Business Leaders.

Further, the data found that ‘double dipping’ is becoming a more common method, as 30% of cases where data was encrypted, the data was also stolen.

Across different industries, the education sector reported the highest level of ransomware attacks, with 79% of higher education organisations and 80% of lower education organisations surveyed reporting that they were the victims of ransomware.

Overall, 46% of organizations surveyed that had their data encrypted paid the ransom. However, larger organizations were far more likely to pay.

In fact, more than half of businesses with revenue of $500 million or more paid the ransom, with the highest rate reported by those with revenue over $5 billion.

This could partially be due to the fact that larger companies are more likely to have a standalone cyber insurance policy that covers ransom payments

“With two thirds of organizations reporting that they have been victimized by ransomware criminals for the second year in a row, we’ve likely reached a plateau. The key to lowering this number is to work to aggressively lower both time to detect and time to respond. Human-led threat hunting is very effective at stopping these criminals in their tracks, but alerts must be investigated, and criminals evicted from systems in hours and days, not weeks and months,” said Wisniewski.

“Experienced analysts can recognize the patterns of an active intrusion in minutes and spring into action. This is likely the difference between the third who stay safe and the two thirds who do not. Organizations must be on alert 24×7 to mount an effective defense these days,” he added.

Sophos provided several recommendations to combat the threat of ransomware and other cyberattacks.

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These include strengthening defensive shields by investing in endpoint protection with strong anti-exploit capabilities, as well as a Zero Trust network.

Investing in adaptive technologies that respond automatically to attacks as well as 24/7 threat detection can provide companies with an extra edge and more time to respond to attacks.

Further defenses include optimising attack preparation by making regular backups, practicing recovering data from backups, and maintaining an up-to-date incident response plan.

Sophos also reminds companies to go back to basics by maintaining good security hygiene, including timely patching and regularly reviewing security tool configurations.

“Sophos’ latest report is a clarion reminder that ransomware remains a major threat, both in scope and scale. This is particularly true for ‘target-rich, resource-poor’ organizations that don’t necessarily have their own in-house resources for ransomware prevention, response and recovery,” said Megan Stifel, executive director of the Ransomware Task Force and chief strategy officer, Institute for Security and Technology.