Fraud Prevention

Most Retailers Feel Like ‘Somebody’s Watching’

IoT Device Protection

In today’’s fast-moving, tech-infused retail arena, one of retailers’ top vulnerabilities centers around their ability to data security. As such, it should come as no surprise that most retailers are very protective of any information exchanging virtual hands.

While U.S. retail data breaches have dropped from 22 percent to 19 percent year over year, 88 percent of senior security executives in the retail industry feel vulnerable to cyberattatcks. According to a research report from Thales e-Security and analyst firm 451 Research, “2017 Thales Data Threat Report,” revealed news that 52 percent of merchants have experienced a data breach to some extent in the past, while 19 percent feel vulnerable to fraud attacks.

This feeling of vulnerability to cyberattacks may be due to the fact that most retailers are not learning from past experiences. The research showed that 11 percent of the 19 percent that experienced a data breach this year had also been on the receiving end of cybersecurity incidents in the past.

Garrett Bekker, 451 Research’s principal analyst, commented on these findings and shared what merchants are doing wrong. “These distressing breach rates serve as stark proof that data on any system can be attacked and compromised,” said Bekker. “Unfortunately, organizations keep spending on the same security solutions that worked for them in the past, but aren’t necessarily the most effective at stopping modern breaches.”

Repeating the same actions and expecting different results is known as Einstein’s definition of insanity, and it’s proving to be what’s happening with retail and data security. Research from this report also revealed that 95 percent of U.S. retail merchants are planning to use sensitive data with advanced technologies like IoT and cloud. The issue that arises here is that 53 percent of those surveyed believe that data use is occurring without the appropriate cybersecurity measures in place.

With the retail industry showing no signs of slowing down its usage of advanced technologies to boost profits, it may be worth retailers’ time to reassess security resources on a quarterly basis to prevent fraud.

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Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

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