Retailers Fearing The Inevitable Cyber Breach
In January this year The British Retail Consortium (BRC) reported that crime in the retail industry is at its highest level since BRC started collecting data in 2004. Shoplifting is still ranked as the number one crime, but in recent years there has been an increase in cyber-crime and online-theft in the retail sector, with a year-on-year increase of 30% between 2013 and 2014.
Symantec Security reports that the retail industry is the industry liable for the largest number of identities thefts in 2014, accounting for almost 60% of all identity crime. In most cases, financial information, such as credit or debit card details, are affected by intrusions.
The nature of retail is growing more complex. With a proliferation of smart devices, omni-channels and cloud-based solutions, a new breed of informed and connected shoppers has emerged; inevitably demanding more and more from retailers. Today’s shopping experience should be frictionless – both online and offline – and should run smoothly from selecting products through to making it to the check out area. These demands are putting more pressure on retailers, who at the same time need to find ways to balance the critical issue of cyber protection through consumers’ every step of the transaction.
However, as the industry matures with technology, so too have cybercriminals. In the internet’s early days, merchandise was the most common object of theft. With the realisation of the value found in consumers’ credit card information, criminals have moved on to aggregating consumer credit card information which can easily be transmitted electronically and anonymously. Since both retailers and consumers demand fast and convenient credit card transactions, cyberthieves can take advantage of this speed by moving quickly to access cash in compromised accounts. With tens of millions of accounts compromised, the take adds up quickly. According to the benchmark study of 350 companies spanning 11 countries, the average consolidated total cost of a data breach is $3.8 million, representing a 23 per cent increase since 2013.
Additionally, retailers have seen their average cost per stolen consumer record increased significantly from $105 last year to $165 in this year’s study.
2014 was a nightmare year for several of our most beloved retail brands. Most noted is the Target breach where the total cost for all activities associated with the breach totalled $148 million. Home Depot was also affected by an intrusion, whose cost is reported to be in the region of $40 million in associated data breach expenses, including identity protection services, credit monitoring, increased call centre staffing, legal and other professional services.
Unfortunately, the real consequence for the retail business is a major blow to customer trust and loyalty. Retailers worldwide are the least trusted by online users with only 20 % of consumers openly admitting they trust retailers. The increased concern among customers about the safety of their personal data is likely to have spurred from the experiencing the direct hit from attacks targeting the retail sector.
Ilias Chantzos senior director government affairs EMEA at Symantec urges:
“Businesses need to be more transparent with customers on how they are keeping data secure. Security needs to be embedded into a company’s value chain, but it should also be viewed internally as a customer winning requirement, and not just a cost.”
For further information on Symantec Security and their services: http://www.symantec.com/
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