Three in five retailers hold digital transformation in fear of cyberattacks
Three in five retailers are putting their digital transformations on hold out of fear of cyberattacks, putting themselves behind the competition in the process, according to a Frost & Sullivan report commissioned by Microsoft.
Web defacement, data exfiltration and ransomware were the biggest concerns for surveyed retailers, with cyberattacks costing large retail organisations an average of $26.45 million in direct and indirect economic loss.
With retail increasingly centered around technology, the risks associated with using such technology increases – 27 per cent of retail organisations surveyed had experienced a security incident – though the greatest indirect losses were due to customers taking their business elsewhere.
“Trust is especially critical for retail organisations today as brand loyalty continues to erode in the digital era,” Frost & Sullivan Industry Principal, Cyber Security Kenny Yeo said.
“If retail organisations do not have the reputation of being capable of protecting their customers’ personal information and financial data, consumers will switch to another option. This is why retail organisations have the highest customer churn after a cybersecurity incident.”
Russell Craig, Microsoft New Zealand national technology officer, notes that the biggest risk comes from “doing nothing”, with retailers who adopt digital product and services to bolster their business see customer advocacy, productivity and profit margins increase by between 11 and 16 per cent in 2017 – figures which are expected to double by 2020.
The study also found that 75 per cent of retail organisations were adopting or considering an AI-based approach to strengthen cybersecurity, which can identify and remove such threats faster than any human is able to.
“Provided retailers consider their cybersecurity strategy from the beginning, they can have their cake and eat it too,” Craig said.
“With the right tools and partners in place the gains retailers can achieve will far outweigh any risk.”
The “Understanding the Cybersecurity Threat Landscape in Asia Pacific: Securing the Modern Enterprise in a Digital World” study was conducted with 1,300 respondents across 13 markets.