Report: US Retailers Are Top Targets for Data Breaches

SurveysAug 02, 2018

Report: US Retailers Are Top Targets for Data Breaches

According to the 2018 Thales Data Threat Report, U.S. retailers experienced twice as many IT security breaches than other retailers worldwide last year.

New York—A new report says that retailers in the United States are experiencing the most IT security breaches worldwide.

The retail edition of the 2018 Thales Data Threat Report based its findings on input from 100 senior retail IT security managers in the U.S. and 96 IT security managers from retailers in other countries to establish the state of IT security today.

It found that despite an increase in IT security spending—84 percent of U.S. retailers polled plan on upping their budgets this year, compared to 77 percent last year and 67 percent of international retailers this year—cyber-attackers are by and large staying one step ahead of companies.

Fifty percent of U.S. retailers surveyed said they experienced IT security breaches last year alone, compared to 19 percent in the 2017 report. Only 27 percent of global retailers, meanwhile, said they experienced a breach last year.

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Seventy-five percent of the respondents in the U.S. said they’ve experienced at least one breach, while 60 percent of global retailers said the same.

The retail industry, which is becoming increasingly digital, is a target for cyber attackers due to its high volume of credit card transactions. In fact, Thales says that overall, it’s the second most breached industry in the United States behind the federal government.

The results of the Thales study on IT security in retail mirror what the Jewelers Security Alliance found in its 2017 crime report. The JSA saw such a large uptick in cybercrime last year that for the first time ever, it broke the losses out separately.

The average dollar loss from cybercrime in the jewelry industry was $1.2 million last year, with JSA President John J. Kennedy calling it a “dangerous and growing crime trend.”

A Bad Investment

Despite the uptick in IT security budgets, the Thales report concluded that retailers are putting their money in places that even they recognize to be ineffective. what they themselves deem the most ineffective places.

Of available tools to battle security breaches, 91 percent of U.S. retailers said analysis and correlation tools are the most effective and 90 percent said data-in-motion— providing security for an e-mail in transit while it’s being sent, for example—is the second most effective weapon.

However, they indicated that their highest spending increases would go to endpoint/mobile defenses (77 percent), even though
they ranked this as the least effective security method. Only 57 percent of retailers plan to increase the budget for data-at rest (stored data) defense, and only 62 percent for data-in-motion defenses, despite these being more effective.
RELATED CONTENT: JSA: Smash-and-Grab Robberies, Cybercrime Up in 2017
“Traditional endpoint and network security are no longer sufficient, particularly for heavy adopters of public cloud resources such as the U.S. retail sector,” the report said, especially with the expanding use of external cloud services like SaaS (software as a service), PaaS (platform as a service) and IaaS (infrastructure as a service).

Where the Money Should Go

 Thales asserts that tools like discovery/classification and encryption or tokenization are key to protecting against IT security breaches today.

Only 26 percent of U.S. retailers polled said they are implementing encryption in the cloud, compared with 30 percent of global retailers.

Fifty-two percent of U.S. respondents cited a lack of perceived need as the top reason for not devoting more resources to tools like encryption and tokenization, while 47 percent also cited impact on business performance and 46 percent were put off by its complexity.

In a past interview with National Jeweler, Kennedy offered a list of cybersecurity recommendations for jewelers specifically, some of which might involve hiring an IT firm.

They include: proper firewalls, up-to-date anti-virus software, the avoidance of “risky” internet sites and the training of staff on the types of mistakes that often let in hackers.

Staff need to be told, or reminded, not to open or click into unknown or suspicious emails, and to look carefully at emails from known parties for misspellings and other anomalies as emails addressed can be spoofed.

Thales said that retailers should “re-prioritize” their IT security toolsets, focusing on ones that offer service-based deployments, platforms and automation to reduce complexity while adding protection.

It also recommended that retailers go beyond national and international compliance measures and employ security tools like encryption and tokenization. Encryption needs to be applied to all platforms, not just desktop and laptop computers.

Specifically, Thales recommends encrypting the cloud, big data, data located within containers and IoT (interconnected devices with IP addresses).

It’s likely that compliance guidelines will one day mandate these practices, the report said, so retailers can benefit from getting a head start on them, hopefully avoiding data breaches in the process.
Ashley Davisis the senior editor, fashion at National Jeweler, covering all things related to design, style and trends.

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