Building Business Resilience: Top 5 Strategies for Entrepreneurs in Preventing Online Fraud
Given the industrial and tech evolution, businesses are at greater risk of falling victim to online fraud.
69% of large businesses have reported suffering some form of cyber attack between 2022 to 2023. While losing at the hands of business scammers is inevitable, specific measures can prevent the loss, partially, if not entirely.
Hence, building resilience against online fraud of any form is crucial. However, don’t confuse cyber security with building resilience. Simply put, building strength against online fraud means your business is resourceful enough to know the sources of potential threats, manage when they happen, and adapt to future threats.
Through this article, you’ll learn about five strategies to build business resilience. Let’s get to them.
Chapters
1. Block and Prevent Sneaker Bots
If you’re an online footwear retailer, you’d be familiar with the term Sneaker Bots, also known as shoe bots. It’s software designed for individuals to purchase the limited availability stock quickly to resell the product at a higher rate later. The primary reason for blocking and preventing sneaker bots is to retain organic traffic and not let a bot overwhelm your website with inauthentic traffic.
Let’s look at a few ways.
Implement Advanced CAPTCHAs and Anti-Bot Measures
The easiest way for sneaker bots to make a purchase is from your website’s inability to identify humans from bots. Ensure you have advanced CAPTCHAs and anti-bot practices in place to prevent such fraudsters from viewing your website.
Regularly Update Website Security Protocols and Algorithms
An outdated security protocol or algorithm is yet another call for sneaker bots. Regularly check the security algorithms and implement them as soon as possible. Doing so reduces the chances of such bots breaking through unethically to your website.
Monitor Traffic Patterns and Behavior Analysis
If you see a sudden increase in your website traffic or bulk purchase from a single user, consider it a cause for concern. Use tools to identify and analyze behavioral patterns of users to spot bots quickly. Leverage the power of AI here. You may already be using AI marketing for your business, so pick a tool that monitors and analyzes user behavior.
Collaborate with Cybersecurity Experts for Continuous Improvement
While the above-mentioned points are necessary, you may need external support to implement solid security practices. In such cases, collaborate with cybersecurity experts. It’ll save you ample time while giving your business the expert security it needs.
2. Implement company token grant administration
What if you authenticate each user before they access your website? That’s what security tokens do.
With company token grant administration, the users or processes send a request to the authentication service, which confirms the user’s identity and then issues a token. Once the user gets a token, they get access to the website.
Establish a Clear Token Granting Policy and Process
Establishing a token granting policy is basically three steps–Request, verify, and tokenize. A user requests access to a server, and the server determines the user and communicates with the authentication device.
Give Role-based Access Control for Token Distribution
Once there’s a request from a user to access your website, ensure only the designated entities have control to distribute them. Giving role-based access control provides the authentication of users and keeps the entire flow in check. Also, you want to give your most trustful employees access to token distribution.
Regularly Audit and Monitor Token Usage
Simply giving role-based access control won’t keep the inauthentic users away. Ensure to regularly audit and monitor the tokens used to identify fraudsters trying to access the website quickly.
Provide User Education on Safe Token Handling
Tokens are meant to be kept safe and be treated as any other confidential data that could be revealed only to services that need it. Provide ample information to the employees handling tokens from time to time. Conduct workshops or educational events on this topic by calling cyber security experts.
3. Strengthen Merchant Gateways
There are numerous reasons why merchant gateways are one of the most vulnerable points for fraudulent activities. Data breaches, phishing attacks, stolen credentials, unauthorized chargebacks, manipulation of customer data, etc., occur at the time of payment. So it’s vital to implement security measures not to let it happen.
Multi-Factor Authentication (MFA) for Merchant Account Access
Businesses use MFA to add that extra security level to validate user identities and offer quick access to authorized users. Users must fill in more information than a username and password for more secure and authentic login.
Monitor Real-time Transactions and Fraud Detection Systems
Tracking transitions in real-time with the help of fraud detection tools ensures not only to observe but also block suspicious activities on your website.
Collaborate with Payment Processors for Enhanced Security
While enforcing secure algorithms to merchant gateways enhances security, collaborating with payment processors furthers security. It acts as a mediator between the user and the business’s banks, authorizing the payment details and ensuring secure transactions.
Regularly Train Staff For Handling Merchant Accounts
Give access to merchant accounts to a selected few employees from the Accounts team and train them to handle the accounts safely. From integration with the payment processor to the number of transactions occurring daily, you need to check all the records.
4. Comprehensive Monitoring and Incident Response
So you find fraudulent activity while auditing the financial records; now what? Having concrete action plans for when your business meets with a crisis of any nature is key as important as comprehensive, regular monitoring.
Proactive Monitoring of Suspicious Activities and Anomalies
Deploy Intrusion Detection systems to monitor unusual patterns and use behavior analysis tools to identify suspicious activities. Fix a baseline normal behavior in the system to easily identify any abnormality, negative or positive.
Develop Incident Response Plans for Various Fraud Scenarios
Creating incident response plans involves:
- Risk assessment.
- Prioritizing scenarios based on severity and.
- Implementing strong encryption and authentication to mitigate the impact of fraud.
It also includes legal and regulatory compliance, notification, reports generation, training and testing, and post-analysis report of the incident.
Real-time Alerts and Notifications for Immediate Action
Ensure you have real-time notifications for immediate action when the incident occurs. Choose key incident points, alerting tools, and thresholds for each vital activity that may occur.
Regular Drills and Simulations to Test Response Readiness
Don’t wait for a real incident to occur. Train your testing staff to rigorously and regularly test the system’s readiness by drilling simulations and analyzing the system’s response.
5. Customer Education and Communication
Business is a two-way street in all aspects. Security is no exception.
While you may enforce stringent practices to prevent online fraud, users may sometimes make grave mistakes, unintentionally putting your business security at risk. Hence, it’s equally important to inform your customers of ways to ensure both parties have a safe and secure shopping experience.
Raise Awareness Among Customers About Online Fraud Risks
Educate your customers about the usage of phishing scams to trick individuals into providing personal information, unsolicited emails, or emails with suspicious links or attachments. Send educational emails to customers or organize fun trivia on your socials addressing this subject.
Provide Tips for Secure Online Shopping and Account Management
Emphasize the importance of using strong passwords, not using public Wi-Fi, keeping the app updated, etc., to customers. Similarly, account managers emphasize the importance of using unique login credentials, limiting account access, updating the information, etc.
Foster Transparency in Communication About Security Measures Taken
Inform your customers about the security measures you take as a business. It fosters trust and credibility and makes the customers more assured and aware of the data they share.
Establish Channels for Customers to Report Suspicious Activities
Encourage customers to report fraudulent or suspicious activities through dedicated reporting portals, customer service hotline, social media channels, third-party platforms, sending gentle reminders through newsletters, emails, etc.
Time to protect your business
While the article enlists seven strategies for fraud prevention, the most important factor is to not take the subject lightly. If you’re under a notion that your business is safe because it’s not as large scaled as your competitors or you have a tight check on data breaches or for whichever reason, your notion will soon be broken.
Your business needs to be ever ready to prevent and manage online frauds when they occur, not if. With humongous amounts of data storage, sharing and manipulating, your business may just be next in line to fall a victim of a fraud. It’s not about being threatened by such frauds, but to be aware and be all prepped! If you haven’t already taken proactive steps in this domain, this article is your cue!
Author Bio:
Parita Pandya is an Engineer turned Writer. She usually finds herself writing for businesses. When she is not writing, she is either strumming her guitar or penning her thoughts down on paritapandya.com.
FAQ
What Is Online Fraud?
Online fraud refers to fraudulent activities conducted over the internet, including scams, identity theft, phishing, and financial fraud.
Why Is Preventing Online Fraud Important?
Preventing online fraud is crucial to protect personal and financial information, maintain trust in online transactions, and avoid financial losses.
How Can Individuals Protect Themselves from Online Fraud?
Individuals can protect themselves by using strong, unique passwords, being cautious with personal information, and staying informed about common scams.
What Are Some Common Types of Online Fraud?
Common types of online fraud include phishing emails, fake websites, identity theft, credit card fraud, and online shopping scams.
What Are Security Measures for Online Banking to Prevent Fraud?
Security measures include using secure and unique passwords, enabling two-factor authentication, monitoring accounts regularly, and avoiding public Wi-Fi for sensitive transactions.
How Can Businesses Prevent Online Fraud?
Businesses can prevent online fraud by implementing robust cybersecurity measures, training employees in security best practices, and using fraud detection tools.
What Are Some Red Flags of Online Fraudulent Activities?
Red flags include unsolicited emails asking for personal information, suspicious website URLs, offers that seem too good to be true, and requests for money or gift cards.
Is Public Wi-Fi a Risk for Online Fraud?
Yes, public Wi-Fi networks can be less secure, making it easier for cybercriminals to intercept data. It’s advisable to avoid sensitive transactions on public Wi-Fi.
What Role Does Antivirus Software Play in Preventing Online Fraud?
Antivirus software helps detect and prevent malware, which is often used in online fraud schemes, making it an essential tool for online security.
Can Reporting Suspected Online Fraud Help Prevent It?
Yes, reporting suspected online fraud to authorities and relevant organizations can help them take action and prevent others from falling victim to similar scams.
What Should I Do if I Suspect I’m a Victim of Online Fraud?
If you suspect online fraud, immediately change your passwords, contact your bank or credit card issuer, report the incident to the authorities, and consider using identity theft protection services.
Are There Tools and Services to Protect Against Online Fraud?
Yes, various tools and services, such as identity theft protection, antivirus software, and fraud detection solutions, can help safeguard against online fraud.
What Are the Risks of Sharing Personal Information Online?
Sharing personal information online can lead to identity theft, phishing attacks, and financial fraud, as cybercriminals can use this information for malicious purposes.
How Can I Verify the Legitimacy of Websites and Emails?
Verify website legitimacy by checking for secure connections (HTTPS), researching the site, and avoiding suspicious links. For emails, verify the sender’s identity and be cautious with email attachments and links.
What Are the Telltale Signs of Phishing Emails?
Phishing emails often contain misspellings, urgent requests for personal information, generic greetings, and suspicious sender email addresses.
Should I Click on Pop-Up Ads or Download Files from Unknown Sources?
No, clicking on pop-up ads or downloading files from unknown sources can lead to malware infection or scams. Avoid these actions unless you trust the source.
How Can I Keep My Mobile Devices Secure from Online Fraud?
Keep your mobile devices secure by installing security apps, using strong passwords or biometric authentication, and keeping your device’s operating system and apps up to date.
Is It Safe to Share Personal Information on Social Media?
Be cautious about sharing personal information on social media, as cybercriminals can use it to target you. Adjust your privacy settings to limit access to your information.
What Should I Do if I Receive a Suspicious Phone Call or Message?
If you receive a suspicious call or message, do not provide personal information. Hang up or delete the message and report the incident to your phone provider or relevant authorities.
Can Education Help Prevent Online Fraud?
Yes, educating yourself about common online fraud tactics and staying informed about the latest scams can significantly reduce the risk of falling victim to fraud.
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