In a speech given to technology industry leaders in 2015, Federal Trade Commissioner Julie Brill stated, “Privacy and data security in the global, data-driven economy are among the most important issues facing companies, consumers, policymakers and other stakeholders.” For major retailers in the United States, cybersecurity may well now be the single most important topic of conversation.
By 2015, retailers as diverse as Target, eBay, Neiman Marcus and Michaels had all suffered some form of security breach that exposed customer information to hackers. And, the problem is growing larger even as retailers and their information technology specialists work to create impenetrable firewalls. Crucial defenses against hacking is vital in the retail environment because retailers are in the top five targeted industries.
Why is retails such an inviting target? Retailers, much like financial institutions, process extraordinarily complex and comprehensive financial data – and they do so over a national platform that frequently encompasses multiple states and locations. Technology analysts believe it is safe to assume that every day, every big box and national chain retailer is under attack. For now, some 99 percent of these attacks are safely dismantled but just as retailers are building defenses, hackers are refining their tactics. It is, therefore, critical for retailers to constantly refresh and update their security systems.
While major retailers have the resources needed to combat cybersecurity breaches, it is not always easy for smaller, independent stores to erect firewalls and security protocols. For these smaller retailers, they need to build a culture of security and responsiveness. With e-commerce rapidly emerging as a secondary source of income and value add for retailers, retailers must now monitor constantly for potential problems and address any possible breaches in real time and with full transparency.
Staying ahead of possible breaches is the ultimate goal. Retailers across the country – large and small – can achieve a degree of satisfaction by embracing the “preparedness list.” First, determine the level of overall cyber risk that the company might be exposed to, second; have experts assess cybersecurity plans in place; third, ensure that management monitors and responds when any potential problem occurs and finally, maintain and update management strategies for the most effective defense against hacking.
While retailers are tackling the enormous challenge of protecting against cybersecurity lapses, the U.S. government is also responding. In January, 2016, President Obama asked Congress to allocate $19 billion for research and development of technologies to block hackers. And, a number of regulatory agencies are now pushing companies to strengthen and consolidate their cybersecurity defenses and reporting.
There is no question that the reputational and income damage that retailers sustain when major breaches occur is significant. Avoiding future problems and providing customers and clients with the reassurance that their proprietary data is safe is now the new test for consumer confidence and lasting consumer loyalty.