E-commerce Business Cyber Risks to Be Aware of in 2024
E-commerce is the trading of products or services online using the Internet. E-commerce businesses have changed the way the world trades and shops worldwide. The Internet has created opportunities for small businesses and startups to reach a wide market and succeed.
E-commerce has made it easier to sell products and services online to the world without a huge capital investment. Businesses can use existing platforms (Amazon, Facebook marketplace, etc.) or create their own e-commerce websites to showcase products or services.
As the Internet plays a huge part in e-commerce success, it can also be the downfall due to cyber risks. E-commerce business cyber risks must be a huge concern to any existing or new e-commerce company.
The article will highlight the top e-commerce business cyber risks and explain how to avoid and deal with these cyber threats.
What is Cyber Insurance?
Cyber-attacks are the biggest threats an e-commerce business can face. The main purpose of cyber-attacks is to steal data and financially exploit businesses. One of the only ways to deal with cyber-attacks, economically and professionally, is to purchase cyber insurance.
Cyber insurance is the final defence against attacks that helps companies deal with attacks and recover without the substantial financial loss. The insurance will cover cyber experts’ advice, threat removal, data recovery, third-party communication, ransom costs and financial loss.
It is important to have cyber insurance, but the insurance will not prevent any attacks. The best way to avoid attacks is to understand e-commerce business cyber risks and have adequate risk management.
Top E-commerce Business Cyber Risks
Lack of Cybersecurity
E-commerce businesses depend on the Internet to provide their products and services. Most of their data is collected and stored online. Every e-commerce website collects large amounts of data from its customers/clients and stores them on company servers.
Cybercriminals are aware of how e-commerce platforms work and desire to attack e-commerce businesses. The e-commerce industry accounts for 32% of all cyberattacks worldwide. The biggest e-commerce business cyber risk is companies that lack high-quality cybersecurity.
Companies must protect their data and business by having various cybersecurity measures. The cybersecurity measures include cybersecurity software, firewall software, access management, data backup and cyber awareness knowledge. Having the proper cybersecurity can help detect, prevent and analyse cyber-attacks.
It is the first line of defence against the risks of doing business online. In addition, cyberinsurance will not cover companies that do not already have adequate cybersecurity beforehand.
Rise in Ransomware
Data, website and company networks are the most important to make sure the company is operating. E-commerce companies need their website to be operative for customers and need to be able to control their data to provide the product or service online.
However, a growing e-commerce business cyber risk is the increase of ransomware attacks. Ransomware is malware that infects a business’s online operations and locks the network, data and website – until the company pays the ransom amount.
Cybercriminals exploit vulnerable companies desperate to regain control of their data and business operations. The ransom is always a large amount and is calculated depending on the business. Cybercriminals are smarter than ever now, and companies must be prepared.
The best way to prevent or deal with ransomware is with cybersecurity, awareness and cyber insurance. Companies must instantly inform their insurance provider if they believe they have been attacked and avoid taking action without expert advice.
Use of Artificial Intelligence in Attacks
Traditional cyber-attacks are already a huge threat, but what if criminals mix traditional attacks with artificial intelligence (AI)? AI cyber threats are a new threat in recent years that is shaking up the e-commerce business world.
AI attacks have made cyber-attacks much stronger, more dangerous and more convincing. Examples of AI cyber-attacks include AI phishing emails, fake calls, deepfake pictures & videos and more.
There was a case in Hong Kong where AI criminals created a deepfake conference call with an employee, which resulted in transferring of USD 26 million, as the deepfake manager requested.
Cybercriminals are using AI to construct and execute very convincing personal cyber-attacks. The e-commerce business cyber risk has made it harder to detect attacks and trust emails. The best way to avoid such attacks is to doubt anything and everything that seems suspicious.
In addition, some AI cyber-attacks have become so strong that they slip through the best cybersecurity and damage the company. Hence, cyber insurance is a must to deal with the consequences of unavoidable AI cyber-attacks.
Human error is the leading cause of cyber-attacks. Human error occurs due to lack of knowledge, weak passwords and negligence. One employee error can lead to infecting the entire company.
Employee error is a common e-commerce business cyber risk that can lead to disastrous outcomes. Employee almost never mean to allow malicious softwares into their business, but mistakes happen.
The error could occur when an employee opens a phishing email, clicks on links, downloads malicious files, surfs malicious websites or ignores cybersecurity warnings. E-commerce companies must train their employees to understand cyber risks and how to detect them.
Cybersecurity awareness training can help the workforce understand cyber-attacks and reduce the chance of cyber-attacks. Employees should be able to question and point out suspicious, malicious emails and websites.
Work From Home Risks
Many e-commerce businesses follow the work-from-home culture. It helps companies save on office rent, as employees can work online. However, multiple employees working from home come with cyber risks that e-commerce should be aware of.
Employees may work in cafes and public areas when a company follows work-from-home (WFH) protocol. Employees using public WIFI increases the chance of man-in-the-middle attacks and unauthorised entry.
Aman-in-the-middle (MITM) attack is an attack when the cybercriminal hides in the middle of the user and an application. The position is taken by creating fake WIFI or hacking public WIFI. Hence, the attacker will observe, record and maliciously use all sensitive data inputted.
The e-commerce business cyber risk can provide cybercriminals with network logins and enable a data breach. E-commerce businesses should enforce regulations when employees work from home and ensure they use encrypted private WIFI.
Why Insurance Is Crucial to Deal with E-Commerce Business Cyber Risks?
All the mentioned e-commerce business cyber risks can ruin the business and its reputation. Dealing with cyber-attacks can be extremely expensive and complicated. Therefore, having cyber insurance for every e-commerce is essential.
Cyber insurance will help companies recover from even the worst cyber-attacks with a reduced financial loss. Financial coverage is vital to recovery which also covers expert advice and services. As mentioned, no company should take action against cyber-attacks without expert help.
In addition, peace of mind allows e-commerce businesses to focus on selling their product or services online without stressing about every click.
Every company that uses the Internet should understand e-commerce business cyber risks and be prepared with cyber insurance.