The retail industry has taken some big hits in data security in recent years, and even with improved cyber security practices, it remains susceptible to cyber crime.
Major retailers such as Target, Home Depot and Neiman Marcus are among the long and growing list of data breach victims.
Retail continues to be one of the most-targeted industries for cyber crime because it processes massive amounts of financial data, and offers a variety of potential access points for hackers.
Money and customer loyalty are on the line for companies, so that’s why they’re investing big in information assurance, boosting spending this year by 67 percent.
Cyber Crime: Retail’s Worst Nightmare
The massive data breach at Target in 2014 was a major wake-up call for the industry. The malware attack on the retailer’s point-of-sale system allowed hackers to steal credit card information from more than 70 million consumers.
Cyber security attacks are costly in multiple ways. Financial losses from data breaches were up 159 percent last year. Potential lawsuits from consumers also raise the price tag, as Home Depot paid $19.5 million to compensate consumers for its breach.
Probably the most troubling fallout for retailers is damage to brand reputation and customer trust, which can result in lower share prices and high reputation-control costs.
“The financial and reputational damage that can be inflicted on a retailer by a major security breach can be so severe, and so destructive, as to approach the financial and reputational damage a commercial airline might suffer from a serious accident,” said Mark Yourek, IBM’s global retail solution lead.
Weaknesses in Retail
In addition to multiple points of sale that give hackers several points of access to customer data, retailers also face cyber threats from current or former employees and third-party vendors.
Some of the primary areas of concern for cyber security breaches in retail are:
- End users accessing malware-laden sites
- Weak passwords
- Insecure system configurations
- Unpatched technology
- Poor network security
Other security risks include threats to a retailer’s cloud system, mobile devices of employees and the growing vulnerability of Internet of Things devices, which led to a recent DDoS attack. This attack targeted Dyn, a New Hampshire-based company that monitors and routes Internet traffic, with hackers blocking its customers’ access to popular sites including Twitter, Spotify, Netflix, Amazon, Tumblr, Reddit and PayPal.
Improving Cyber Security
Looming threats and financial losses have caused the industry to act. Retailers are implementing technologies such as cloud-based cyber security, advanced authentication and big data analytics to improve information assurance. In fact, 90 percent of retailers have adopted a risk-based cyber security framework.
Likewise, 76 percent of retailers have completed the transition to Europay, MasterCard and Visa (EMV) payment terminals, the chip-based payment system that offers more sophisticated authentication technology.
Retailers are also hiring more cybersecurity professionals with advanced training, as well as empowering chief information security officers. According to a study, 52 percent of retailers now have a CISO in charge of security risks. The role has expanded beyond technical knowledge to include communications, risk management and business objectives.
Cyber security professionals can build and acquire these skills by investing in a Master’s of Cyber Security degree from a qualified, accredited university.
These stricter security measures mean retailers also are in desperate need of qualified rank-and-file cyber security professionals to protect their systems from hackers. Demand for cyber security workers in retail has increased by 89 percent in recent years.
The nature of the retail industry—with constant in-person and online transactions—means it will always be a target for hackers. That’s why cyber security plays a crucial role.
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