Enterprises report up to $240M in annual losses due to E-Commerce fraud
By Canadian SecurityNews Retail ecommerce fraud
TeleSign, the Mobile Identity company, has released new research in collaboration with RSA, the Security Division of EMC, that shines a light on widespread enterprise fraud as a result of mobile growth. According to the research, enterprises have reported up to $240 million in annual losses each due to mobile fraud, despite asserting they have adequate systems in place for detection and remediation.
“An uptick in online fraud resulting from today’s environment of large-scale data breaches and security incidents is something TeleSign is seeing first-hand,” said Steve Jillings, CEO of TeleSign. “Illicit activities including spamming, phishing attempts, affiliate fraud and e-commerce fraud all have a common primary motivation: money.”
As part of a research study conducted by J. Gold Associates, LLC and sponsored by TeleSign and RSA, the Security Division of EMC, a web-based survey of 250 organizations with average revenue of $2.54 billion gathered insights on the growth of mobile e-commerce and the accompanying fraud issues. Many consumers now interact with the Internet primarily through mobile devices and this shift has a profound impact for organizations with an online presence and how they regard cyber security, loss prevention and fraud.
“With the shift to mobile e-commerce well underway, we know that hackers and fraud are never far behind,” continued Jillings. “This report has businesses expecting a 47 percent growth rate in mobile revenues over the next few years. We believe this represents a green field for fraud incidents if security postures remain the same.”
Additional key findings from the research include:
– Average revenue loss due to mobile fraud: $92.3M per year (among 250 organizations with average revenue of $2.54 billion).
– Mobile growth trend: More than 50 percent of respondents believe that mobile revenues will grow 11-50 percent over the next three years, and 30 percent believe it will grow 51-100 percent.
– Rising fraud trend: The growth of mobile interactions is expected to increase the percentage of mobile incidents significantly, with 19 percent of companies already indicating that 25-49 percent of their fraud incidents are due to mobile. These rates are expected to grow, and in some cases at least double over the next 2-3 years as mobile revenue contributions increase, unless significant remedial actions are implemented quickly.
– Current lack of adequate security: One in four businesses currently don’t require login identification for mobile users.
– Addressing the problem: In the next 2-3 years, next generation authentication technologies like biometrics, soft tokens and other two factor authentication will largely replace the user name and password as the primary method of authentication.
“Mobile security has huge payback, likely returning 10-20 times or more of the investment,” said Jack E. Gold, founder and principal analyst at J.Gold Associates. “On the flipside, companies who fail to make the required investment in enhanced mobile security will not only have sharply reduced revenues, but their operation costs will be much higher. A major finding from this report is that in the next 2-3 years, next generation authentication technologies like biometrics, soft tokens and other two factor authentication will largely replace the user name and password as the primary method of authentication.”
TeleSign delivers account security and fraud prevention solutions, helping customers secure more than 3.5 billion online accounts worldwide based on a user’s mobile identity and driven by real-time, global intelligence, including reputation scoring and device data.
In order to prevent mobile fraud and loss, TeleSign recommends users take the following actions:
– For Consumers: Websites are increasingly providing two-factor authentication options to better secure accounts, but require users to find and ‘turn on’ this feature, often located under the security settings.
– For Cloud service providers and application developers interested in offering a secure and easy two-factor authentication solution to their customers, learn more at telesign.com.
For access to the full report, click here.
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