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Posted By Behalf on 11/16/2017 in Security

Has Cybercrime Affected Consumer Confidence?

Has Cybercrime Affected Consumer Confidence?

From data breaches and ransomware to email compromise and ID theft, cyber security failures are dominating the news cycle. This is not fake news — cybercrime is now a large-scale, global crisis. 2015 and 2016 set records for payment data hacking scandals with industry leaders like Target, Arby’s, T-Mobile and Yahoo falling victim to the latest hacker techniques. More recently, the threat has moved beyond financial data and into Intellectual Property with the devastating digital thefts at Sony and HBO. Most experts even believe that cybercrime played an instrumental role in determining the current President of the United States.



The financial costs of security breaches are staggering; according to a report issued by the FBI’s Internet Crime Complaint Center (IC3), the financial loss from cybercrime in the U.S. exceeded $1.3 billion in 2016, and this number only accounts for the cases that were directly referred to law enforcement agencies. Security breaches in the U.S. are continuing to climb at an all-time record pace. With instances of internet-based hacks and scams sharply rising every year, 2017 has already proven to be the worst year for cybercrime to date. Recent data released by the Identity Theft Resource Center (ITRC) reveal that there have been 1,140 breaches as of November 1, 2017, which is 4.3 percent higher than figures from all of 2016 - with two months till year’s end. Moreover, the ITRC expects we will reach as many as 1,500 breaches by the end of the year, threatening to critically disrupt finance markets and put many consumers at risk.



The lesson to be learned by recent headlines about Verizon, Gmail, and Chipotle — each company having been targeted by cybercriminals this year  — is that no company is beyond the reach of hackers. Whether a business has millions of customers and billions of dollars at stake, or they are an early stage startup with little to no brand recognition, no company is immune to the risk. While large companies make attractive cybercrime targets because of the size of the prize, hackers often target small businesses because they are known to be less secure and more vulnerable. 


In evaluating the cost/benefit of pursuing any investments in payment security, a company must consider a broader range of potential financial losses than just the direct cost of a breach. An additional casualty in the cyberattack wreckage has been consumer confidence. With reporting on new cyberattacks seeming to stream daily, consumers have become leery of sharing their payment information under any purchasing scenario – in store, over the phone, and especially online. Hesitation has always been the enemy of purchase conversion and the fear about data breaches and identity theft has created a whole new reason for shopping cart abandonment. Businesses who sell their products and services online are already feeling the pinch of any perceived lack of security in their check out journey.


“Fear over sharing their payment data has changed the psychology of the consumer at the point of purchase,” explains Crystal Eastman from Behalf, a fintech specializing in commercial payments. “Whereas conversion-oriented design principles have previously focused on expediting the checkout journey - ideally making it so fast that a buyer does not have time to second guess ‘Do I really need this?’ or ‘Can I get this at a better price somewhere else?’ - we are now having to confront a complete lack of confidence in the transaction processing piece, which used to be a given. People are now asking themselves, ‘Do I need this so badly that I am willing to put my financial information at risk?’ each time they are making a purchase decision. The most successful online merchants are now actually introducing more secure payment options at checkout, which adds more steps to the check out journey but also effectively combats the crisis of confidence.”

 

While the spike in cyberattacks across a slew of industries can make these crimes seem inevitable, there are steps small businesses can take to strengthen their data security, defend themselves against cybercrime crises, and build trust with their customers to secure their confidence. A secure company is one that has a thorough understanding of how its systems operate, so that it may then keep these from being compromised. Having an informed team of employees is crucial to protecting small businesses from scams like email fraud, ransomware, and malware threats. Implementing cybersecurity training during the induction of new employees can ensure that all members of the company will have a working knowledge of cybersecurity basics. This way, they can best recognize potential threats and respond to them effectively.


In order to safeguard against the loss of financial data, and the costs associated with recovering it, companies must use data encryption methods when storing sensitive information like the personal details and account numbers of their customers. Encrypted information appears as code to hackers, meaning that sensitive data will be unreadable and therefore unusable to them. In addition to installing firewalls and antivirus softwares, it is also important that businesses heavily protect their passwords, on both company computers and devices employees bring from home. This means encouraging the use of unique passwords and two-factor authentication, as well as regular password resets.


Lastly, a great way to defend against the impact of any cyberattack is to reduce the amount of sensitive data captured and stored. Evaluate alternative payment acceptance methods that eliminate the need for customers to provide you with CC or ACH information. These types of changes both reduce a company’s actual risk and simultaneously demonstrate a strong, visible commitment to protecting one’s customer data. As referenced by Eastman, the perception of security is nearly as valuable as the security measures themselves.



Article submitted by Yulia Vereshagina, Senior Marketing Manager at Behalf. Behalf is a NYC-based Fintech specializing in working capital solutions for the B2B community. The Behalf payments platform empowers commerce for businesses large and small by unlocking the power of “Trade Terms” on every transaction. When businesses buy with Behalf, they enjoy their choice of flexible payment terms and up to six months of extra time to pay. When businesses accept Behalf, they see sales increase by 10%-20%. To learn more about how Behalf is transforming the way businesses buy and sell, visit www.behalf.com.

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