Online retailers could lose a staggering £5.9 billion through severe data breaches each year, based on the average cost and frequency of cyberattacks in the e-commerce sector, research reveals.
New research, published by cloud solutions company iomart, analyses the financial impact of typical, severe and catastrophic data breaches to reveal what each could cost top companies and social media platforms.
How much each retailer stands to lose depends on how long it takes them to identify and then contain a breach, which correlates to the number of data records stolen – as outlined by IBM’s cost of a data breach study.
Online sales have grown threefold over the last ten years in the UK, seeing a 324% rise. A massive 87% of retail purchases are made online – excluding groceries – resulting in the B2C e-commerce market currently being worth an estimated £189 billion.
However, research reveals that an average of 43% of businesses experienced a cybersecurity breach each year, while almost 90% of login attempts made on online retailers’ websites are actually hackers using stolen data.
If 43% of online retailers experienced a severe data breach and lost a subsequent 7.27% of their value, this would equal a momentous loss of £5.9 billion in the UK alone.
The biggest reason for data breaches within the e-commerce sector is flaws in payment systems. In fact, Shopify experienced a security flaw in an API endpoint last year which could have impacted over 800,000 merchants in more than 175 countries.
With data breaches on the rise as a result of compromised security systems during the Covid-19 crisis, it’s never been more important for online retailers to protect customers’ data.
Bill Strain, chief technology officer (CTO) at iomart, urges retailers to prioritise data security. He said: “These figures are a stark warning about the importance of investing in data protection.
Many smaller retailers wouldn’t survive the operational impact of a successful cyber-attack, let alone the financial one of a punishing fine on top. Looking at your potential risk and knowing where your data is, controlling who has access to it, and making sure it’s secure should be an absolute priority.
“It’s still the case that most cyber-attacks start by exploiting our human vulnerability. By training staff to spot suspicious emails, login attempts or links you can lock the front door and then use technological solutions to ensure the hackers can’t get in around the back.”
iomart also offers some top tips on how online retailers can create an effective defence against such an attack:
- Keep IT systems and software up-to-date
- Store sensitive data separately
- Control users’ access and privileges
- Secure the email gateway
- Do regular off-site backups of your data
- Provide regular security training for all staff
To see the results of iomart’s Dangerous Data: The Cost of a Data Breach analysis, visit: https://blog.iomart.com/cost-of-a-data-breach