What Is Ransomware?
January 15, 2026
Table of contents
Key takeaway
Ransomware is a modern form of digital extortion that encrypts and often steals data to pressure victims into paying a ransom. As ransomware attacks grow more targeted and data-driven, understanding how ransomware works and how to detect and contain it early is essential to protecting sensitive data and maintaining organizational resilience.
Video Overview
Ransomware is one of the most disruptive cyber threats facing organizations today. It is a type of malicious software designed to block access to files, systems, or data (most commonly through encryption) until a ransom is paid, usually in cryptocurrency.
In practical terms, ransomware means digital extortion. Unlike traditional malware that may quietly steal or damage data, ransomware openly holds organizations hostage, disrupting operations and applying pressure to force payment. Over the past decade, ransomware has evolved from a nuisance affecting individuals into a billion-dollar criminal enterprise targeting enterprises, governments, and critical infrastructure around the globe. Ransomware was involved in 44% of all confirmed data breaches in 2024, marking a 37% increase year-over-year and underscoring its continued growth as a threat.
What Does A Ransomware Attack Look Like?
At a high level, a ransomware attack has three key steps:
- Gains unauthorized access to systems or networks
- Encrypts files or locks systems, disrupting business operations
- Demands payment, often under threat of data exposure or permanent loss
The result is operational downtime, financial loss, and increased regulatory and reputational risk, especially for organizations that handle sensitive or regulated data.
How Does a Ransomware Attack Work?
Attackers commonly deliver ransomware through phishing emails with malicious attachments or links, compromised websites, stolen credentials, or brute-force attacks against exposed remote services such as remote desktop protocol (RDP). Once inside, ransomware spreads laterally across an environment, seeking out valuable files, databases, backups, and network shares.
Modern ransomware strains rarely affect a single endpoint. Instead, they are designed to propagate across an organization, encrypting large portions of the environment before revealing themselves. The attack culminates in a ransom note (often with a countdown timer) warning that decryption keys will be destroyed or stolen data leaked if payment is not made.
Common Steps of a Ransomware Attack
Most ransomware attacks follow a recognizable lifecycle seen in other cyber attacks:
- Initial access through phishing, stolen credentials, exposed services, or vulnerabilities
- Privilege escalation to gain administrative control
- Lateral movement across systems and cloud environments
- Data discovery and exfiltration of sensitive information
- Encryption of files, systems, and sometimes backups
Extortion and ransom demand, often with escalating threats
Ransomware Initial Access Points
Ransomware most commonly enters environments through:
- Phishing emails and malicious attachments
- Compromised or reused credentials
- Exposed RDP, VPN, or SaaS accounts
- Unpatched software vulnerabilities
- Supply chain and third-party compromises
Because many attacks begin with legitimate access, ransomware defense increasingly depends on visibility into user behavior, data access, and abnormal activity — not just malware signatures.
The Role of Data Exfiltration in Ransomware
Modern ransomware is no longer just about locking files, it is a data security threat. Before encrypting systems, attackers often exfiltrate sensitive data, including intellectual property, customer records, and regulated information.
Data theft is nearly universal in modern ransomware incidents — 96% of ransomware cases investigated included data theft, reinforcing the evolution toward double extortion tactics where stolen data is used to pressure victims even if backups exist.
This shift dramatically increases risk. Even if systems are restored from backups, stolen data can still be leaked, sold, or used for future attacks, creating long-term legal and compliance exposure.
Double- and Triple-Extortion in Ransomware Attacks
Ransomware attacks increasingly rely on multi-layered extortion models:
- Double-extortion ransomware encrypts data and threatens to publish stolen information if the ransom is not paid.
- Triple-extortion ransomware adds further pressure through tactics such as DDoS attacks, direct outreach to customers or partners, or threats of regulatory exposure.
These techniques transform ransomware from a technical incident into a full-scale business crisis, as give threat actors more leverage to get their payout and bypass more traditional ransomware responses such as just backing up files.
Types of Ransomware
Ransomware has evolved into several distinct forms:
- Crypto ransomware encrypts files and data, rendering them inaccessible until payment is made.
- Locker ransomware locks users out of devices or systems without encrypting individual files.
- Double-extortion ransomware combines encryption with data exfiltration and leak threats.
Ransomware-as-a-Service (RaaS) commercializes ransomware by allowing affiliates to launch attacks using rented malware kits, sharing profits with developers.
Ransomware vs. Malware
While ransomware is a type of malware, the terms are not interchangeable:
- Malware refers broadly to malicious software, including spyware, trojans, worms, viruses, and other common types.
- Ransomware is specifically designed for financial extortion, using encryption and data theft as leverage.
In short, all ransomware is malware — but not all malware is ransomware.
Ransomware vs. Ransomware-as-a-Service (RaaS)
Ransomware refers to the malicious software and attack techniques used to encrypt data, exfiltrate sensitive information, and extort victims for payment. Traditionally, attackers developed, deployed, and operated ransomware themselves, requiring significant technical expertise and infrastructure.
Ransomware-as-a-Service (RaaS) is a business model that has commercialized ransomware operations. In a RaaS model, skilled developers create and maintain ransomware tools, payment infrastructure, and leak sites, then lease or sell access to affiliates who carry out the attacks. Profits are shared between the developers and the affiliates, lowering the barrier to entry and dramatically increasing the scale and frequency of ransomware attacks.
The rise of RaaS has transformed ransomware from isolated criminal activity into a repeatable, scalable ecosystem. Affiliates often specialize in initial access—using phishing, credential theft, or exploitation of exposed services—while core RaaS operators handle encryption tools, extortion negotiations, and data leak operations.
For defenders, the distinction matters. RaaS-driven attacks are typically more opportunistic, faster-moving, and data-focused, with built-in double and triple extortion tactics. This makes early detection through identity monitoring, data access visibility, and exfiltration detection especially critical.
In practice, while ransomware describes the attack itself, Ransomware-as-a-Service explains why ransomware has become more widespread, more sophisticated, and harder to defend against—and why modern ransomware defense must address identity abuse and data exposure, not just malware execution.
Consequences of a Ransomware Attack
The impact of a ransomware attack extends far beyond the ransom payment itself:
- Financial losses from downtime, incident response, legal fees, and regulatory penalties
- Data loss or exposure, even if the ransom is paid
- Operational disruption, especially in healthcare, government, and critical infrastructure
- Reputational damage and loss of customer trust
For some organizations, especially small and mid-sized businesses (SMBs), these consequences can be existential: Among small and midsize businesses (SMBs), ransomware was present in 88% of breaches, compared with 39% in larger organizations, highlighting how prevalent the threat is to less mature, and possibly less prepared, organizations.
Why Ransomware Is a Data Security Problem
Ransomware has evolved from a system-availability threat into a data-centric security risk. Modern ransomware attacks are designed not just to encrypt systems, but to identify, steal, and weaponize sensitive data as leverage. As a result, ransomware now directly intersects with data protection, privacy, and regulatory compliance concerns.
Traditional endpoint-focused defenses are no longer sufficient. While endpoint protection may detect known malware or block execution, it often lacks visibility into where sensitive data resides, which users and applications can access it, and how that data moves across endpoints, SaaS platforms, and cloud environments. Attackers exploit this gap by quietly locating high-value data long before encryption occurs.
Ransomware operators increasingly conduct data discovery and classification as part of their attack workflow, prioritizing intellectual property, customer data, financial records, and regulated information. This stolen data enables double and triple extortion, turning a technical incident into a legal, financial, and reputational crisis—even if systems are restored from backups.
Effective ransomware defense therefore requires data-aware security controls that provide continuous visibility into sensitive data across the enterprise. Organizations must be able to monitor abnormal access patterns, detect unauthorized data movement, and identify early signs of exfiltration. Behavioral detection—such as unusual file access, mass copying, or unexpected data transfers—is often the earliest indicator of a ransomware attack in progress.
Strong data security controls also reduce blast radius. By enforcing least privilege access, monitoring data usage, and limiting unnecessary data exposure, organizations can prevent attackers from reaching the most valuable assets in the first place. This shifts ransomware defense left—interrupting attacks before encryption and extortion occur, rather than responding after damage is done.
Five Steps to Prevent and Detect Ransomware
Preventing ransomware and detecting it early requires shifting from a purely endpoint-focused model to a data-aware security strategy. The most effective defenses focus on controlling access to sensitive data, monitoring how it is used, and identifying risk before encryption or extortion occurs.
1. Enforce Strong Identity and Access Controls
Ransomware attacks often begin with compromised credentials rather than malware exploits. Enforcing least-privilege access ensures users, service accounts, and applications can only access the data they truly need. Multi-factor authentication (MFA), strong credential hygiene, and regular access reviews reduce the likelihood that attackers can move laterally or reach high-value data once inside.
Identity controls are especially critical across SaaS and cloud environments, where excessive permissions can silently expose sensitive data to attackers using legitimate access paths.
2. Discover and Classify Sensitive Data with DSPM
Organizations cannot protect what they cannot see. Data security posture management (DSPM) provides continuous discovery and classification of sensitive data across endpoints, SaaS applications, and cloud infrastructure. This visibility allows security teams to understand where regulated, confidential, or business-critical data lives — and how exposed it is.
By mapping data stores, access paths, and risk factors, DSPM enables organizations to prioritize ransomware defenses around the data attackers are most likely to target for encryption and extortion.
3. Monitor Data Access and Movement for Behavioral Anomalies
Ransomware operators typically access and stage data before encrypting it. Monitoring how data is accessed, copied, and moved is one of the most effective ways to detect ransomware early. Behavioral indicators such as mass file access, unusual download activity, or unexpected data transfers often precede encryption by hours or days.
Comprehensive visibility into user and application behavior across endpoints and cloud services allows security teams to identify suspicious activity and intervene before attackers execute the final stage of the attack.
4. Reduce Data Exposure and Limit Blast Radius
Excessive data access increases ransomware impact. Reducing unnecessary permissions, eliminating stale accounts, and tightening access to sensitive data significantly limits how much data attackers can reach — even if an account is compromised.
By minimizing data exposure and segmenting access to high-value data, organizations can contain ransomware incidents, reducing both encryption scope and the effectiveness of double- or triple-extortion tactics.
5. Integrate Data Signals into Detection and Response Workflows
Ransomware defense improves when data risk signals are integrated into security operations. Alerts related to abnormal data access, exfiltration attempts, or risky permission changes should feed directly into incident response workflows alongside endpoint and identity telemetry.
This integrated approach allows security teams to correlate identity compromise, data abuse, and ransomware activity in real time—enabling faster containment, more informed response decisions, and reduced reliance on reactive recovery measures.
Modern ransomware is a data breach in disguise. By the time systems are encrypted, your most sensitive files have often already been stolen for double extortion. Traditional endpoint defenses miss this early exfiltration because they look for malware, not data movement. Cyberhaven detects the behavioral anomalies that precede encryption—stopping ransomware operators from stealing your data in the first place. See how to inoculate your organization against extortion with a personalized demo of the Cyberhaven platform.
FAQs about Ransomware
Can ransomware be detected before encryption?
Yes, ransomware can often be detected before encryption by monitoring abnormal identity behavior, mass data access, and suspicious data movement or exfiltration.
Why is ransomware a board-level risk?
Ransomware creates financial, legal, and reputational exposure by disrupting operations and threatening public disclosure of sensitive data, often triggering regulatory scrutiny and customer impact.
Why don’t backups fully solve ransomware risk?
Backups restore availability, but they do not prevent attackers from leaking stolen data, which is now a primary leverage tactic in modern ransomware attacks.
How does ransomware impact regulatory compliance?
Ransomware incidents involving data exfiltration can trigger breach notification requirements under regulations such as GDPR, HIPAA, and state privacy laws — even if systems are restored.
What are early indicators of a ransomware attack?
Early signs include abnormal login behavior, privilege escalation, mass file access, unexpected data transfers, and attempts to disable backups or security tools.
How do attackers choose which data to steal?
Attackers prioritize high-value data such as intellectual property, customer records, financial data, and regulated information that increases extortion leverage.
What security controls are most effective against ransomware?
Controls that combine identity monitoring, data discovery and classification, behavioral analytics, and exfiltration detection are most effective at stopping ransomware before encryption.
Is a ransomware attack considered a data breach?
If sensitive data is accessed or exfiltrated — even without public disclosure — a ransomware incident may qualify as a reportable data breach under many regulations.
Does paying a ransom eliminate legal risk?
No. Paying a ransom does not guarantee data deletion and may still result in regulatory penalties, litigation, and reputational damage.
Why is data visibility important for ransomware response?
Understanding what data was accessed or stolen is critical for breach assessment, regulatory notification, and accurate risk reporting.