Cybercriminals typically head wherever money or data that can create money is available, so it makes sense that the retail sector is a common cybercrime target. Techniques like infiltrating company systems to steal customer information and accessing organizational data through unsecured wireless networks are issues, but smaller-scale attacks also affect the industry.
A retail shop doesn’t necessarily have to become the target of a multinational cybercrime organization to see significant losses because individual customers or fraudsters can also victimize them. Dealing with these criminals’ techniques is challenging, especially because so many small businesses now focus on selling their products online and look to streamline the shopping experience as much as possible.
Small and medium-sized retail businesses must invest in cyber security to protect their profits in the coming years because cybercrime isn’t showing any signs of slowing down. This guide looks at some areas where retail is vulnerable and profiles five startups providing cyber security in retail industry solutions.
Areas the Retail Industry Needs Cyber Security Help
The retail sector needs assistance protecting its customer-facing systems. A company’s point of sale is incredibly vulnerable to cyber attacks because most shoppers now use credit cards, and techniques like malware and skimming can efficiently steal their data. Cyber security startups are helping retail businesses by providing the following services:
Fraud Prevention
Fraud prevention technology can stop criminals from using unauthorized or stolen credit cards through techniques like password-free authentication. The gist is that retailers can utilize software to prevent criminals from using stolen login credentials or card numbers and making fraudulent purchases online. In-store solutions like facial recognition software at the point of sale are also gaining traction in the industry as a method of curbing fraud.
Revenue Protection
Companies of all sizes must protect their revenue streams, a process that’s becoming increasingly challenging because of credit card chargebacks. The idea is that customers can contact their credit card companies and file a dispute to receive reimbursement after making a purchase, which is sometimes done fraudulently. Cyber security firms have software that can automate the dispute process, which goes a long way toward blocking instances of fraud and protecting their revenue.
Risk Assessment
Any company that operates online or uses contactless payment systems in store should understand its risk. Staying completely offline is almost impossible at this point, so ensuring you know your vulnerabilities and develop solutions to them is becoming increasingly vital. Cyber security firms are creating risk assessment software that addresses issues and protects small businesses from malware, phishing, and DDoS attacks that could cripple them financially.
These three areas concern the retail industry because it’s relatively easy for scammers with some technical know-how to use the outlined methods. Retailers must find solutions to these problems as soon as possible to protect their revenue streams and financial viability.
Five Startups the Retail Industry Should Watch in 2023
Some cyber security startups are focusing their energies where the retail sector needs them the most. These companies understand the vulnerabilities retail is experiencing and are working toward creating attainable solutions. Startups to watch in 2023 include the following:
1. Hanko.io
Hanko.io is a German company founded in 2018 that uses a biometric login and delegated authentication solution to make eCommerce checkouts safer. This service allows retailers to authenticate and manage users through an app or web browser and supports Visa and Mastercard’s advanced authentication procedures. This financial fraud protection technology gives retailers more control over the authentication process, allowing them to improve the speed of their checkout processes, as well.
2. Preciate
Preciate is taking security in a different direction by offering customer facial recognition software. This technology allows vendors to accurately identify an individual in less than a second, reducing the instances of fraudulent contactless credit card usage at the point of sale. The system also deletes the customer’s data the second the transaction finalizes, leaving behind a mathematical vector of the user’s facial features and preventing this information from falling into the wrong hands.
3. Ominaya
Ominaya offers multiple fraud prevention technologies to retail businesses. ZIMMA software uses blockchain technology to prevent retail companies from experiencing fraud via numerous channels, including mobile wallets, credit cards, and payment interfaces. BIMBA is the company’s customizable cyber security solution that protects the individual devices the organization uses.
4. PayShield
Payshield makes chargeback protection software that checks over 16,000 data points to identify unrecognized descriptors on credit cards. The technology uses artificial intelligence to check these data points, streamlining the entire process and blocking fraudulent purchases without restricting legitimate customers. The result is fewer chargebacks for retailers and a reduction in the expenses associated with them.
5. GoldSky Security
GoldSky Security’s main product is DREAMSecure, a cyber risk management platform gaining traction with small and medium-sized businesses. This product protects retailers from various attacks, including malware and phishing, by addressing security gaps it finds and prioritizing data security and compliance. The result is a safer all-around environment for the retailers that use the system.
These startups to watch in 2023 provide technology that’s helping retailers stay ahead of the threats they encounter daily, but more work will be necessary as cybercriminals evolve. There’s still plenty of room for more startups to address some of the specific issues companies in the retail industry experience.
The Evolution of Cyber Security
Cyber security is becoming increasingly specialized because every industry has specific needs. Retailers are learning that a general cyber security platform might not suffice because hackers can attack so many distinct vulnerabilities, so they’re looking for more specialized methods of protecting their data. Startups that can address some of these needs could experience growth in the coming years as retailers seek new ways to guard their assets.
Option3 plays a part in this evolution by bringing together investors and cyber security startups. We understand where the cyber security industry is lacking and focus on startups that address these underserved frontiers. Contact Option3 for more information on cyber security products for the retail sector.