Thought leadership. Threat analysis. Cybersecurity news and alerts.
Effects of Petya Cyber Attack Still Linger
Even as weeks have passed since the Petya ransomware attack, its negative effects still linger.
Operational and Financial Costs of Petya Cyber Attack
At the height of Petya’s global attack last June 27, Nuance – a company that offers transcription service to doctors – publicly acknowledged that certain systems within its network were affected by the global malware incident.
Bloomberg reported that nearly four weeks after the ransomware attack, many doctors still can’t use Nuance's transcription service. According to Bloomberg, hospital systems, including Beth Israel Deaconess in Boston, still can’t use Nuance’s transcription platform – one that allows doctors to dictate notes from a telephone. This forces doctors to revert to the old ways of making notes using a pen and paper. The company told Reuters that it expects within two weeks to have its transcription platform service restored to substantially all clients.
Nearly 50% of Nuance’s $1.95 billion in revenue in 2016 came from its health-care and transcription business, Bloomberg reported. As a result of the malware attack, Nuance expects an adjusted 3rd quarter revenue of $494 million to $498 million, short of the $509.8 million revenue that analysts expect, Reuters reported.
TNT Express, a small-package ground delivery and freight transportation company acquired by FedEx in May 2016, is another company that experienced disruption in its operation even after weeks of the Petya ransomware attack. FedEx publicly acknowledged last June 28 that TNT’s worldwide operations were significantly affected by the Petya cyber attack. According to FedEx, as of July 17, all TNT hubs, depots and facilities are operational. FedEx, however, said that customers are still experiencing widespread service and invoicing delays as a significant portion of TNT’s operations and customer service functions reverted to manual processes.
“We cannot estimate when TNT services will be fully restored,” FedEx said in a statement. The courier company added, “Given the recent timing and magnitude of the attack, in addition to our initial focus on restoring TNT operations and customer service functions, we are still evaluating the financial impact of the attack, but it is likely that it will be material.”
FedEx further said that while the company can’t yet quantify the amounts, it has experienced loss of revenue as a result of decreased volumes at TNT, remediation of affected systems and incremental costs associated with the implementation of contingency plans. FedEx added that it doesn’t have cyber or other insurance in place to cover the cost of the attack.
While FedEx still can’t quantify the cost of Petya cyber attack, other multinational companies like Saint-Gobain, Reckitt Benckiser Group and Mondelēz International were able to put a price on the June 27th ransomware attack.
Saint-Gobain, a French multinational corporation that produces a variety of construction and high-performance materials, said that based on its preliminary assessment, Petya’s financial effect on the company’s first half sales is limited to about 1%.
Reckitt Benckiser Group, a British multinational consumer goods company, for its part, said in a statement that Petya’s disruption meant that the company’s revenue growth in the second quarter would be down by 2%. Reckitt’s act of putting a price on cyber attack is a revelation in itself, Bloomberg said, as the company has just spent $18 billion in cash in acquiring baby formula producer Mead Johnson Nutrition Co.
For its part, Mondelēz International, a snacking company with 2016 net revenues of almost $26 billion, in a statement said, “Our preliminary estimate of the revenue impact of this event is a negative 300 basis points on our second quarter growth rate.”
“Any time there is a cyberattack and a company is exposed to that threat, that presents both reputational risk as well as the risk from disruption,” Bloomberg Intelligence analyst Mandeep Singh said. “Since a lot of the deals get signed toward the end of the quarter, the timing of it could have impacted certain deal closures.”
Secondary Effects of Cyber Attacks
Cyber attacks result in a number of potentially significant secondary effects. The following are 4 of the secondary effects of cyber attacks:
1. Property Damage and Loss of Life
Cyber attack may affect life-critical functions or databases. Affected remote surgery may result in loss of life; critical SCADA alarm systems may damage properties.
2. Reputational loss
Companies may voluntarily acknowledge or acknowledge out of necessity cyber attacks – when pressured by social media revelations from customers, third party revelation or as a disclosure requirement by certain governments. The practice of companies of sending apology notes to clients may have a negative effect on the company’s reputation.
When customers can’t access your company’s site or when your automated processes are disrupted, this automatically impacts the company. Stock prices are typically volatile after a cyber attack. Nuance shares, according to Bloomberg, have dropped almost 8 percent since June 27, when Petya ransomware attack began.
3. Litigation Cost
When a cyber attack disrupts your services and this, in turn, causes the disruption of the services of your customers, these may lead to a costly litigation. In the case of data breach, affected customers may sue your company for the breach. Ruby Corp., formerly known as Avid Life Media – the parent company of the dating site Ashley Madison, said that it will pay $11.2 million to settle a case brought on behalf of nearly 37 million Ashley Madison users whose personal details were exposed in a July 2015 data breach, CNBC reported.
4. Cost of Additional Security Controls
Another consequence of a cyber attack is the cost of additional security controls. The data breach on Ashley Madison prompted Ruby Corp. to spend millions of dollars to improve user privacy and security, according to CNBC. After a data breach, affected companies typically don’t just patch the specific vulnerability, they implement additional security controls such as:
Cyber risk is becoming more and more of a reality for many businesses in the 21st century. In the World Economic Forum’s Global Risks Report 2016, cyber attack was ranked in 11th position in both likelihood and impact.
Our team can help your business evaluate the cyber risks and recommend cyber defence strategy. Connect with us today and protect your business.
Your comment will be posted after it is approved.
Leave a Reply.
Steve E. Driz, I.S.P., ITCP