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Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft

With major retail security breaches in the news, it’s time to reveal cybersecurity trends and prepare to fight upcoming attacks.

Updated on December 06, 2021

8 mins read

While retailers keep opening new stores, hackers continue mastering their skills. Unfortunately, this means that even more sophisticated retail cybersecurity challenges are yet to come. Cyber attacks are no longer a threat only to the IT department but rather to the whole enterprise.

A lot of businesses have already increased their retail security budgets to avoid breaches. Today, companies have to focus more on retail security and loss prevention than customer satisfaction if they want to comply with data processing regulations. The task isn’t the easiest, but with the right approach, it’s absolutely doable.

Chief information security officers (CISOs) face many retail information security challenges while trying to prevent stealing products. Fixing system vulnerabilities should be part of their daily tasks. They should also monitor the latest tendencies, work on retail security solutions, and implement new machine learning technologies.

So what cybersecurity threats in retail should businesses expect in the recent decade? Read on and learn how to build an effective CISO strategy for 2021 and upcoming years to protect your business.

Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft


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Overall statistics and threat localization

According to the Cyber Security Mid-Year Snapshot 2019 by Cyber Security Hub, critical infrastructure, phishing scams, and email takeovers are the three most dangerous retail security challenges. That’s why enhancing enterprise security is high on the agenda for many businesses small and large.
Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft
Source: Cybersecurity mid-year snapshot 2019

In 2019, Verizon reported over 53,000 incidents and 2,216 confirmed data breaches. If a company like Verizon can become a victim of hackers, every single business should put risk management front and center. Here are the most common cyber attacks Verizon has faced in the last year:

  • Credential phishing – 30.43%
  • Malware (besides ransomware) – 21.74%
  • Ransomware – 13.04%
  • DDoS attacks – 10.14%
  • BEC/wire transfer fraud – 7.25%
  • Account takeover – 5.80%
  • Malicious or unsafe apps (cloud) – 4.35%
  • Malicious or unsafe apps (mobile) – 1.45%
  • SQL injection – 4.35%
  • Man-in-the-middle attacks – 1.45%

Looking at the data, we can see that hackers hit retail security from every angle. Almost 75% of all attacks are carried out either through denial of service, web applications, or payment card skimmers.

The AV-Test Institute registers more than 250,000 new malicious programs every day.
Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft
Source: AV Test – Malware Statistics

There’s no doubt that retail security is undergoing some very troubling changes that require urgent action from CISOs and business leaders.

Why is maintaining security and compliance so challenging?

When it comes to managing a retail business, choosing a payment processing platform is unavoidable. If you want your business to grow, you have to be ready to process cashless transactions and protect your customers’ private information.

This is where the real struggle begins. As a retailer, you’ll need to comply with the Payment Card Industry Data Security Standards (PCI DSS) to accept credit card payments. This means your company has to pass a PCI DSS compliance audit and obtain PCI DSS certification. It isn’t the easiest thing, mainly because you need security experts to control the whole process.

Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft
Read more: Learn how Intellias helped a B2B payment provider achieve PCI DSS compliance

Among other significant retail cybersecurity challenges on the European market is complying with the General Data Protection Regulation (GDPR.) This regulation requires so many security measures that a lot of retail store owners fail to understand how serious it is. Often, that’s due to the difficulty of updating legacy systems to comply with the GDPR.

Sometimes, it’s even due to the pure desire to earn money without caring about the security of customer data. Our team knows all the ins and outs of how to make the compliance process more manageable. See for yourself in our recent case study.

Money is often one of the main reasons businesses are lax about cybersecurity threats in retail. But is it worth the risk? Even one data breach can harm your clients and organization.

A lack of qualified people who can protect retail companies from the most common types of security risk in retail further complicates compliance. It’s nearly impossible to keep up with all of the updates in the cybersecurity industry unless you’re fully immersed in it.

A growing number of newly invented attacks should be a wake-up call for retailers and e-commerce brands. What makes matters worse is that online retail platforms are connected to multiple systems and partners. And if even one link in the chain is broken, the entire network is compromised.  

The difference in security measures across merchants’ websites creates conditions for scalable side-channel attacks, also known as distributed guessing attacks. A hacker can generate all card details required to make a transaction by spreading different payment requests across multiple e-commerce websites and getting a confirmation from one of them. With legitimate card data in their hands, attackers can transfer money or make purchases. 

Top 6 cybersecurity trends retailers should keep an eye on

Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft

Due to the increasing number of cybersecurity threats in retail, the industry will only become more prone to data breaches and skillfully crafted cyberattacks. However, if you know what to expect, you can be well-armed with security solutions to protect your enterprise from retail theft.

We’ve picked the top five cybersecurity predictions for the upcoming year. Let’s see what awaits retailers next year.

1. Same threats, different approaches

While new cybersecurity threats are coming, companies should still pay attention to existing vulnerabilities throughout 2021. Instead of leaving known vulnerabilities untouched, treat them as being just as dangerous as newly discovered ones.

It’s always more costly to fix something later, so protect your enterprise security by solving even minor issues.

2. Risk management

The tendency to increase cybersecurity budgets isn’t going to slow down, as was suggested in Cyber Security Hub’s 13 August webinar. That means there will be more security awareness trainings inside enterprises.

In 2021, retail companies start prioritizing cybersecurity by strategically planning retail theft prevention.

3. Data protection

With increasing cloud adoption, data protection will become even more of an issue. While the cloud is the future of ecommerce, it also brings unknown bugs and a high risk of mistakes. The newer the technology, the bigger the chance hackers will find out how to breach it before it can be fixed.

That’s why data security issues in retailing software one of the top priorities for retailers in the years to come. It will also push enterprises to create more data security governance programs to prevent data breaches in private clouds.

4. GDPR compliance

Once retailers start processing customer information, they have to start complying with GDPR. As we mentioned, the GDPR applies if your retail business deals with the European market.

Even though complying with GDPR is time-consuming and requires legal assistance, it has to be done to avoid lawsuits.

Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft
Read more: Learn how Intellias implemented GDPR security protocols for an enterprise eLearning solution

5. Application security self-testing

In the new year, companies working with DevOps will be securing their applications by adopting security self-testing, self-diagnosing, and self-protection technologies. This will help them assess new vendors and detect possible cybersecurity threats in retail software.

Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft
Read more: Find out how Intellias helped an automotive client secure their IoT apps by detecting vulnerabilities

6. Keeping things uniform

With an upsurge of side-channel attacks, retailers will need to strengthen their security posture by standardizing and centralizing their payment networks to provide better protection.  

Standardization means all merchants’ websites need to require the same information and the same number of fields to validate card numbers. Distributed guessing attacks won’t be practical and scalable if all payment systems run the same security checks.  

Centralization can be achieved through a holistic view of all payment activities within a network. Globally integrated, centralized networks and 3-D Secure mechanisms will enable retailers to detect and stay immune to almost all types of security risks in retail,  distributed guessing attacks in particular.   

Retail companies need to solve existing security problems, follow new trends, and hire skillful staff to take care of possible cybersecurity attacks. If they don’t, they’ll make hackers’ lives much easier.

To-dos and must-haves for CISOs

CISOs are responsible for making risk-based decisions and coming up with the most efficient cybersecurity strategies. Here’s what they should do to have a clear picture of what’s on the cybersecurity horizon and be able to protect their enterprises from stealing products:

Now CISOs are having to flex different muscles, work with a broader set of stakeholders and build an increasingly diverse team to handle different areas of concern.

The new CISO’s playbook: 5 rules to follow
  • Engage stakeholders in cybersecurity discussions and explain the importance of cybersecurity protection.
  • Effectively inform business leaders about cybersecurity threats and how challenging it might be to fix them at later stages.
  • Encourage bigger investments in addressing retail information security challenges.
  • Strive for passwordless authentication.
  • Provide essential cybersecurity skills training for employees.

The role of CISO isn’t easy, but it’s critical for the wellbeing of any digital enterprise. Since cyberattacks are becoming more sophisticated, CISOs have to plan strategically and ensure they’re taking advantage of emerging tools and countermeasures.

How deep learning algorithms can assist in identifying security risks

Artificial intelligence (AI) and machine learning (ML) algorithms can seemingly perform miracles. Although AI and ML technologies are relatively new, they promise many possibilities for identifying security risks.

We must recognize that although technologies such as machine learning, deep learning, and AI will be cornerstones of tomorrow’s cyber defenses, our adversaries are working just as furiously to implement and innovate around them.

Steve Grobman, security expert at McAfee

ABI Research predicts that machine learning in cybersecurity will increase big data, intelligence, and analytics spending to $96 billion by 2021.

But how exactly do deep learning algorithms solve security issues in retailing software?

  • Advanced AI technology can be used to detect cybersecurity threats that are not well suited to their professional counterparts.
  • Machine learning can empower the retail industry with data that CISOs can use to prevent retail theft.
  • While deep learning in cybersecurity cannot fully substitute humans, it opens up enterprises to a whole new world of possibilities.
  • AI can eliminate a lot of human work by spotting and classifying cybersecurity issues.
  • The combination of machine learning and rule-based analysis will push the development of intelligent reasoning and analysis of security threats.
  • Detection, prediction, and relationship diagram algorithms will play a massive role in preventing retail theft.

Retail Security Challenges: In-depth Security Coverage to Prevent Retail Theft
Source: Machine learning algorithms power security threat analysis

Of course, machine learning algorithms cannot fully automate the process of malware and threat detection. Nevertheless, this technology promises a bright future for retail network security. Today, retailers can use sophisticated tools and algorithms to detect many different types of threats.

Final thoughts

The retail industry has become one of the easiest targets for hackers. With the growing number of ecommerce stores, retail security is at stake. It’s no wonder companies have started spending more on data protection and compliance with regulations such as PCI DSS and GDPR.

Cybersecurity trends in retail continue to evolve and require innovative solutions. However, retailers still need to fix existing issues before moving on with their theft prevention strategies.

CISOs should pay attention to deep learning algorithms and learn how to use them to their advantage before hackers do. Even if AI cannot fully substitute humans, it can be of great help when detecting and identifying malware and other types of cybersecurity threats.

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