There is a good reason why manufacturing companies are seen as a prime target by cyber attackers: they are heavily reliant on information and operational technologies. Disruption and downtime can bring their business to a complete standstill and threaten its very existence. Which is why, once inside your business systems, the attackers’ blackmail demands can reach eye watering systems. And it’s why they get paid too.

The sector has seen a worrying number of cyberattacks in recent years. At the start of 2022 KP Snacks was hit with a ransomware attack affecting both manufacturing and shipping processes causing a shortage in supermarkets. There were still supply issues three months later. Safestyle, a double glazing supplier based in Yorkshire had 400 000 customer details stolen and hackers asked for £4m a ransom in return. Caledonian Modular construction company went into insolvency 12 days after their cyberattack in February 2022. Daylesford Organic had client personal details leaked by Russian hackers, with addresses posted on the dark web including those of celebrities such as David Attenborough. Most recently Morgan Advanced Materials has been hit by a cyberattack with significant downtime and system compromise as a result. There are many other examples.

Cybercrime is a dynamic landscape, with not only the types of attacks but the nature of the operators or gangs involved becoming ever-more sophisticated. Understanding the ecosystem in which cyber criminals operate is the first step in understanding and managing the risks involved.

The criminal ecosystem

Cybercrime is an organised and sophisticated business with structured personnel, run by professionals. Ransomware gangs have team leaders, malware developers, data miners, and more; individuals and teams working together on cases like a legitimate business. And all over the world too. Russia is a hotspot for cyber gangs, but we’ve seen operations running from all corners of the globe.

While cybercrime has a far greater geographical reach and speed of execution, it also has many similarities in organisational structure to more traditional criminal gangs. However, it also has one major advantage. Its sophistication makes it extremely difficult for authorities to trace the perpetrators and originators of any cyberattack.

One interesting study compared cocaine trafficking in the 1990s with modern day ransomware. Profitability was similar, with both earning over 90% profit per unit. However, cocaine trafficking resulted in 1 arrest per 2 kilos, and 1 death per 4 kilos. The chances of a ransomware arrest are almost non-existent, a trafficker being 625 times more likely to get arrested. And no ransomware attacker gets killed.

The ransomware gangs have names and some analysts even produce league tables with an assessment of market shares. In the second half of 2022, one assessment showed BlackCat in the lead with responsibility for around 15% of the ransomware attacks globally. Hive had the next largest share at 13.5% having ‘earned’ their place by attacking hospitals without question (some groups claim to shy away from certain sectors to operate more “ethically”). Other names such as Black Basta, Dark Angels, Phobos and Vice Society are said to hold between 3% and 6% of the market, the latter being responsible for attacks on UK schools. Previous leaders such as REvil, Conti, LockBit and DarkSide are likely to have morphed into new structures.

One of the most notable developments over the last few years has been the rise of Ransomware as a Service (RaaS); a business model not dissimilar to Software as a Service (SaaS). RaaS changed the face of cybercrime. A cybercriminal no longer needs to be a “techie” as they can just purchase ready-to-go ransomware. It’s added a new layer to the cybercrime constitution.

Ransomware operators develop ransomware which is sold to affiliates via websites on the dark web, marketing and packaging it for sale in a manner similar to businesses that trade legitimately. They engage in marketing campaigns, publish user reviews, provide service guarantees as well as after sales support. Unsatisfied with the service? Suppliers offer your money back. Levels of sophistication range from subscription models to portals allowing tracking of the status of an infection.

This allows individuals in any country to get involved in the criminal activity. Often they operate as lead generators, having gained access to a business, they pass on the opportunity to more sophisticated players to exploit in return for a cut in profits.

A recent report on ransomware trends published jointly by the UK, US and Australian cybersecurity authorities noted that the National Cyber Security Centre has even come across gangs who purport to offer a 24/7 help centre to victims to expedite ransom payments and restore encrypted data.

Double extortion

The consequences of ransomware can be devastating for its victims, as once inside an organisation’s IT system it enables data, files and systems to be encrypted, with payments being demanded in exchange for the decryption key. Business is brought to an abrupt halt. We find that backups are rarely configured in a way which will survive a ransomware attack. The overwhelming majority of ransomware attacks now also involve data exfiltration. The criminals first steal your confidential and sensitive data before encrypting it, adding another level of risk. This particular type of attack, sometimes called the Double Extortion technique, means that not only can a demand be made to decrypt data, but a release to the public of stolen data will be threatened unless a further ransom demand is met. Gangs have websites and PR machines which support their threats to highlight their successful attacks and publish stolen data.

In the past, some ransomware gangs focused on bigger, national targets. Now, some of them have become wary of the attention of law enforcement agencies (who save most of their resources for large infrastructure attacks) and have shifted their focus to small and medium-sized organisations. They can be particularly vulnerable to attack, because they often only rely on their external IT support companies, and therefore do not have the right protections in place.

One 2022 report shows that 55% of manufacturing and production companies suffered ransomware attacks. Cybercriminals know that businesses are reliant on operational resilience, and that prolonged downtime can be disastrous to supply chains and revenue growth. As a consequence, they can be more likely to pay ransom demands (which can range from the tens of thousands to many millions of dollars.)

It is however worth bearing in mind the Information Commissioner’s Office (ICO) and National Cyber Security Centre stance on this. Both bodies have made it clear that payment of ransom will not protect stolen data or result in a lower penalty by the ICO, if an investigation is made. Furthermore, remember you’re dealing with criminals – payment offers no guarantee of decryption or return of stolen data or prevention of re-extortion a few weeks down the line.

An evolving threat requires professional defence.

Cyberattacks shut down organisations and are now one of the most serious threats to any business. They should be at the top of your risk register. Attackers and the techniques they use are sophisticated, ever evolving, and defending against them is complex. Small and medium-sized manufacturing companies are particularly vulnerable. When you have professional criminals attacking your organisation, you need professionals defending you.

Find out more about Mitigo’s Cybersecurity Services. Email [email protected] or call 020 8191 1094 .

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