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If you launch an online business or want to improve your existing brand, you must set up a good security system, not just to minimize cybersecurity risks, but also to compete with established rivals.
In addition to a shared customer base, your competition may already have a productive balance between security and friction that keeps their business safe without driving people away. That’s the standard you should aim for to avoid losing traffic to competitors.
It seems easier said than done, but there are a few key strategies that can help you plan the ideal cybersecurity system for your business and customers.
READ: The FTC Safeguards Rule — Why Your Business Needs to Improve Cyber Security in 2023
Understand and Minimize Cybersecurity Risks
Do you run an e-shop, banking service or website that stores medical records? Each type of domain may have something of interest to criminals, such as personal data that can be used fraudulently or by account hackers who can exploit such information for money or access to otherwise secure systems.
Think about what assets could attract bad actors to your online business and read up on threats you could face down the line, as well as the damage they’d cause if successful.
Take synthetic identity fraud, for example — also known as sleeper fraud or credit bust-out fraud. It uses IDs made of both fake and real details that were stolen, but they can also be a combination of real information, or even completely manufactured by an algorithm that creates sequences, such as fake social security numbers, with randomized data.
Statistics show that up to 95% of legacy security systems can’t spot synthetic IDs. As a result, they cause around 80% of credit card fraud losses.
But how does knowing about this threat improve your security? For one, you learn just how valuable stolen data can be, but also what it can do in the hands of fraudsters. They can take out loans, file insurance claims, grab more sensitive details and more.
As a business owner, you come to terms with the importance of fraud detection and, with further research into the workings of different cybercrimes, you should be able to find the best possible suite for your platform.
READ: Increased Cybersecurity Risks Are a Threat to Corporate Governance
Go for a Multi-Layered Security System
There are too many threats to online businesses to justify relying on basic cybersecurity and manual checks — even more so as your platform grows in popularity.
It’s telling that less than 40% of consumers in the US, UK, Germany, and France felt they could trust businesses’ ability to counter scams in 2021, according to Statista. To ensure your customers are secure and confident in your services, focus on attaining improved fraud prevention measures.
The same statistics reported that processes like card verification number (CVN) and email verification make a difference, but don’t hesitate to make your KYC system even more sophisticated.
If you have data or tools that criminals would want to get their hands on, protect your business records with additional measures like encryption, two-factor authentication, device fingerprinting, data enrichment, and intensive training in online security.
Set Internal Safeguards
The biggest question is: How do you balance multi-layered security and frictionless user experience for customers and staff? Start by taking responsibility for part of your cybersecurity.
For starters, know that the most common cybercrimes to safeguard your business from include phishing and identity theft, both of which could be tackled manually if you know what you’re looking for.
For instance, your business should train employees on how to spot and report suspicious transaction patterns, as well as what phishing messages would look like and how to protect their passwords.
Build on this foundation with regularly updated software that scans for malware and vulnerabilities, while also checking credentials without needing too much input from customers or even potential employees.
Prepare yourself for the latter scenario as insider fraud cost businesses 5% of their annual revenue in 2020.
Choose Customer Security Checks that Limit Friction
Just using reverse email or phone lookup tools can spare your users unnecessary trouble and give you plenty of information to verify their identity and purpose. Look for this balance in your security efforts.
Advanced options like device fingerprinting can be frictionless, too. Such systems collect information about a device and its configurations, including the presence of proxies or emulators. This is especially useful as many people use these technologies alongside VPNs for nefarious purposes.
The Bottom Line
With all this in mind, it’s clear that moving onto a more complex digital footprint, behavior or other types of analyses will minimize cybersecurity risks — just don’t let the friction overwhelm your users.
Jimmy Fong, CCO at SEON, is a young veteran in the fraud detection space. The last three leading fraud and payments startups he has been involved in have been acquired by Visa, Ingenico, and American Express. He’s a regular speaker on disruptive technology in the fintech space and a massive advocate of flattening the tech barrier for merchants and financial institutions to fight fraud effectively. A graduate of Edinburgh University, he looks to marry his passion for tech with doing a bit of good in the world.