Lacks government coordination: security vendors
Businesses are largely being left on their own to counter financial fraud, security companies have agreed.
In a newly issued study CyberSource has said its findings highlighted online retailers’ frustration at the lack of co-ordination and government support in the fight against fraud.
It concluded that merchants continue to bear the increasing burden of fraud.
In the absence of any recommendation in the report for the creation of a centralised anti-fraud body to co-ordinate efforts across the financial and enforcement industries, Yuval Ben-Itzhak CTO at secure web gateway supplier Finjan Inc said is clear that companies are on their own.
Although technology can significantly mitigate the risk of a company’s systems being breached, it appears that as many as one in eight online UK firms are losing more than 5% of their revenues to fraud.
According to Ben-Itzhak, this illustrates the phenomenal cost that card fraud is costing UK organisations.
Although CyberSource Corp has noted the creation of the UK Police Central e-Crime Unit (PCeU) as a step in the right direction, it suggests that the level of fraud losses is hurting too many businesses who rely too heavily on slow, expensive, and unscalable manual forms of fraud monitoring.
Businesses are losing money in more ways than one, as a result.
The secure electronic payment and risk management supplier’s study revealed that 41% of consumers who do not yet shop online say it is because of concerns about security.
Technology has only a role to play, CyberSource reports. “2008 saw increased traction for new services such as device fingerprinting, where scripts can run on merchant sites to gather non-personal information from a consumer’s laptop or PC and can be used to uniquely identify that physical device.” But it added, “In the year ahead, the major developments appear to be based less on technology and more on process.”
Ben-Itzhak added, “The emphasis has to be on planning and working with your IT security supplier on developing the strategy. Then, once a good system is installed, it is equally essential to maintain the systems’ efficacy.
Once exposed, a business that has had to count the cost of fraud, will find that the damage can extend much further than the top line of direct losses.
As well as potential reputational damage, there is the additional cost of rejecting valid orders, staffing manual review teams, and administration of fraud claims all to be taken into account.