Study: Retail could lose big in ransomware attack
U.S. retailers could suffer significantly during a worldwide malware infection.
According to “Bashe attack: Global infection by contagious malware,” an attack on the world’s computer systems by “ransomware,” or malware that shuts down a computer until the attacker is paid money, could cost the U.S. The study was released by the Cambridge Centre for Risk Studies, Cyber Risk Management project (CyRiM), and Lloyd’s.
Retailers would be specifically harmed by a short-term decline in consumption across channels, resulting from encryption of e-commerce platforms and electronic payment systems. Several e-commerce sites would experience site delays and service interruptions as their service providers were affected by the ransomware, shutting down some components of their websites. Online consumers visiting the impacted sites would see an increase in error messages and difficulties, causing higher shopping cart abandonment rates and a subsequent drop in conversion rates.
In addition, some households would likely fall victim to a global ransomware attack, leaving them unable to purchase goods due to encryption of their devices. Other households would reduce computer usage and Internet browsing for hours or days due to fear of infection.
Meanwhile, failure in some electronic means of payment would affect POS purchases at brick-and-mortar stores.
The study also finds retailers would be negatively impacted by disruptions in the global supply chain. Maritime port operations would likely be suspended due to outages in their IT and inventory management systems. Ground and air transportation would also likely be disrupted, compounded by the fact that many companies which source and manufacture goods would have their systems paralyzed by the attack, halting production and distribution.
The total economic loss from such an attack is estimated to range from $85 billion to $193 billion globally and $46 billion to $89 billion in the U.S. Retailers in the U.S. would represent 16% of those losses, meaning the U.S. retail industry would lose between about $7.4 billion and $14.2 billion.
According to “Bashe attack: Global infection by contagious malware,” an attack on the world’s computer systems by “ransomware,” or malware that shuts down a computer until the attacker is paid money, could cost the U.S. The study was released by the Cambridge Centre for Risk Studies, Cyber Risk Management project (CyRiM), and Lloyd’s.
Retailers would be specifically harmed by a short-term decline in consumption across channels, resulting from encryption of e-commerce platforms and electronic payment systems. Several e-commerce sites would experience site delays and service interruptions as their service providers were affected by the ransomware, shutting down some components of their websites. Online consumers visiting the impacted sites would see an increase in error messages and difficulties, causing higher shopping cart abandonment rates and a subsequent drop in conversion rates.
In addition, some households would likely fall victim to a global ransomware attack, leaving them unable to purchase goods due to encryption of their devices. Other households would reduce computer usage and Internet browsing for hours or days due to fear of infection.
Meanwhile, failure in some electronic means of payment would affect POS purchases at brick-and-mortar stores.
The study also finds retailers would be negatively impacted by disruptions in the global supply chain. Maritime port operations would likely be suspended due to outages in their IT and inventory management systems. Ground and air transportation would also likely be disrupted, compounded by the fact that many companies which source and manufacture goods would have their systems paralyzed by the attack, halting production and distribution.
The total economic loss from such an attack is estimated to range from $85 billion to $193 billion globally and $46 billion to $89 billion in the U.S. Retailers in the U.S. would represent 16% of those losses, meaning the U.S. retail industry would lose between about $7.4 billion and $14.2 billion.