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The COVID-19 pandemic has pushed nearly all retail operations online as customers embrace e-commerce wholeheartedly.While the shift to digital channels has opened up new sales channels for many businesses, it has introduced further complications. Data privacy concerns and cybersecurity have become mainstays of business, and many companies are finding this transition difficult to execute.
Consumers are highly sensitive to data usage due to the numerous data breaches and unethical data sharing practices committed by large tech companies over the past decade. E-commerce companies, regardless of size, cannot use ignorance as an excuse. Data breaches can cause serious brand damage and erode consumer trust.
Here are five ways ecommerce companies can protect customer data and prevent costly data security breaches.
Examine data collection practices
Many companies collect massive amounts of data from their customers not fully planned How they will use these datasets. E-commerce companies often collect data directly from customers through forms and behavioral data from the platform. The rationale behind this data collection is that more data is better. This principle sounds good in theory, but in practice creates some loopholes.
For starters, asking for more data than is absolutely necessary can put off many consumers who recognize irrelevant data collection. Also, the more data you collect, the more data you need to store, increasing the cost of analysis. While cloud storage is relatively cheap now, you have to factor in the high costs of future risks such as data breaches.
You are responsible for all data collected by you. A breach involving data disconnected from day-to-day business can expose you to unnecessary damage. For example, you may be collecting customer interest data but failing to utilize it in your analysis. Leaks involving these datasets can only damage your brand, and they serve no commercial purpose in the first place.
Gather only what you need. You will gain the trust of a wider audience and reduce the risk of any data breaches.
RELATED: 8 Ways a Data Breach Could Bankrupt Your Company Tomorrow
Check payment channels
Today, one-click checkout has become popular among consumers. However, this practice does not require storing customer credit card information on your server. For starters, this is a violation of PCI compliance rules. Many companies tokenize card information and use the process to enable one-click checkout.
However, this approach still exposes you to significant risks from data breaches. You’ll also paint a target on your back for malicious hackers everywhere. Payments is a highly regulated industry and breaching these laws has severe consequences.
As such, the risk-reward ratio offered by one-click checkout doesn’t make sense for many e-commerce companies. You may find it makes more sense to use a payment provider or processor such as Stripe or Square. You can outsource payment-related compliance to these companies while mitigating the risk of brand damage in the event of a data breach.
View user access rights
How robust are your backend systems? Many e-commerce companies have suffered data breaches due to malicious insider attacks. These attacks bypass network security protections because insiders gain access to sensitive systems. Many network security solutions monitor baseline network usage to flag suspicious activity, but there is no guarantee that such alerts will arrive in a timely manner.
While it’s nearly impossible to eliminate malicious insider attacks, you can take a big step toward preventing them by: Review data access. Check who has access to your sensitive information and how well your data security is implemented.
For example, customer data and identifying information should always be concealed using obfuscation or masking techniques. These datasets should only be accessible by a small set of roles with relevant customer-facing capabilities. Every other role should only work with masked data, whether that data is in production or development.
Review the access you provide to contractors and other third-party tools. Integrating these tools and roles often creates configuration errors that can compromise data security.
Related: 7 Revenue-Killing Mistakes Ecommerce Retailers Make
Two-factor authentication is essential to modern web security. Modern network protection relies on passwords. However, the passwords are highly suspicious and advanced artificial intelligence engines can quickly decipher them. 2FA is the best way to protect your customers and their data.
There are many factors that can be used when implementing 2FA. The most common factors are passwords and codes sent to users’ personal devices. Some users are reluctant to provide personal information; in this case, security questions work well.
Another option you can implement is to use an authentication application, such as Google Authenticator. This method allows you to verify the user’s device and identity without collecting personal information. So you can build user trust while always protecting them.
Check your security agreement
No matter how strong your security is, review your protocols regularly. Is your team applying patches on time, and are your systems configured correctly? Often, security or system updates break old configurations, giving malicious actors an attack vector to gain access to your system.
Auditing user access to customer data is also standard practice. When your employees leave your company, make sure you review and revoke access. User IDs belonging to departed employees (often called phantom users) provide hackers with an easy entry point into your system.
Compliance needs change over time, so make sure your infrastructure can handle the new requirements well. Review best practices in data security and, if necessary, change your processes to match them.
Related: How to Secure Your Ecommerce Business with Endpoint Protection
Data security is an integral part of e-commerce
Data security is an essential part of every eCommerce business. Online channels help you sell more to consumers, but you must install strong data security protocols to gain your audience’s trust. Without this trust, it will be much more difficult to expand your business or compete in the modern marketplace.