Retailers receive Black Friday cyber warning

Retailers have been told they need to increase their cyber security in the run up to tomorrow’s Black Friday and Cyber Monday weekend as the threat of falling victim to cyber-crime is becoming a major buying decision for shoppers.

Brokers have been told there is an expectation that the four day weekend which traditionally sees retailers introduce big discounts to lure shoppers will come with a rise in attempts by cyber-criminals to cash in.

However research from one insurer has found that the fear of cyber-crime is putting off on-line shoppers.

Broker Lockton’s Assistant Vice President for Cyber and Technology, Jack Bassett, said the rises in the values of the amounts spent had made Black Friday a prime target for cyber criminals.

“Increased digitalisation borne out of the pandemic has no doubt been a powerful catalyst for growth in the eCommerce and wider retail sector in the last few years,” he explained. “In turn, the industry has become even more connected, efficient and reliable, with improved functionality and applications. However, the greater the need for speed and convenience to fulfil this demand, the more vulnerable online retailers make themselves to cyber-criminals, fraud or to simple human error. This is evidenced by the fact that there are over 30,000 cyber-attacks targeted at websites each day across the globe.”

Bassett continued: “With Black Friday spending levels increasing each year in recent history, retail businesses have become even more of a target for cyber-crime, data breaches and ransomware attacks. Cyber criminals are becoming increasingly sophisticated and frequent in their attacks, constantly adapting the nature of their malware strategies to align with movements in the sector.

“According to Verizon’s 2022 Data Breach Investigations report, 98% of 629 incidents in the retail sector involved a financial motive. As such, more than ever, these types of criminals are able to create major financial chaos and often time their attacks to coincide with peak sales periods to increase the threat. Consequences of cyber-attacks will vary according to the nature of the incident but will typically involve privacy breaches as well as business interruption losses.”

“As a result, cyber criminals will undoubtedly be looking to capitalise on the record levels of spending set to take place across the biggest retail weekend of the year,” he concluded. “If they haven’t already, therefore, businesses will need to begin thinking about obtaining sufficient, specialist cyber cover to protect themselves from these reputational and financial risks. At a time when the average cost of a data breach in the retail industry is $3.28 million, this time of year is the most vital for final Black Friday preparations, and retailers shouldn’t overlook this element.”

QBE Insurance said that more than half (54%) of Black Friday shoppers would give a wide berth to an online retailer that had had a date breach, highlighting how seriously shoppers are taking cyber security ahead of what is predicted to be a bumper shopping weekend.

It added With the cost-of-living crisis likely to boost Black Friday shopping, online retailers need to up their cyber security game to protect consumer data and confidence.  If not, they risk losing business. QBE carried out a survey which found 76% of Black Friday shoppers said that the cyber security of an online retailer mattered to them.

The survey found 55% of Black Friday shoppers said that a strong cyber security published on an online retailer’s website would make them more inclined to shop there. A total of 38% of Black Friday shoppers said that they would be more likely to shop with an online retailer if they had successfully prevented and managed a cyber-attack.

Erica Kofie, head of cyber proposition for QBE Europe, said: “It is crucial that online retailers are prepared for cyber-attacks this Black Friday or risk losing customers. Having a strong cyber security policy is more important than ever considering the ever-evolving complexity of cyber-attacks. Businesses that fail to demonstrate a strong enough cyber policy could even struggle to secure cyber insurance, leaving them vulnerable and less protected from cyber-attacks.”

QBE Insurance said that more than half (54%) of Black Friday shoppers would give a wide berth to an online retailer that had had a date breach, highlighting how seriously shoppers are taking cyber security ahead of what is predicted to be a bumper shopping weekend.

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