November 21, 2017
‘Tis the Season for Cybercrime Attacks
Posted December 2, 2016
An Estimated 50 Million Cybercrime Attacks Will Strike Online Retailers at the Peak of the Holiday 2016 Shopping Season
Here’s what you need to know now:
A look back at cybercrime statistics from holiday seasons past could offer a glimpse of what we could have in store for Holiday 2016. Warning: It might not be pretty.
The last quarter of 2015 was the biggest quarter ever for online sales, culminating in a record-breaking shopping period from Black Friday through Cyber Monday. Digital transaction volumes soared at the expense of in-store sales during this time, with peaks seen between midday and 9 PM. Which makes a lot of sense when you consider growing consumer demand for anytime, anywhere shopping that maps to the natural rhythms of most customers’ days, versus having to work around physical store hours.
I count myself as part of the consumer republic that sees this shift as a big win. In fact, in the race to conquer my holiday shopping list, I had my Black Friday favorites. Gifts for nieces and nephews? Done and done— at Target.com. Why? Because Target’s online shopping experience is fast and seamless, with no friction.
Contrast that with a lot of other sites, where I’ve had to create a password to make a one-time purchase, get a text message to ensure it’s actually ME on the other end, and enter my dog’s name, the name of my very first elementary school, and who knows what else to provide answers to secret questions meant to verify my identity the next time I pay a visit.
Don’t get me wrong, I do appreciate the fact that there’s an extra layer of security built in to protect my digital identity. But quite often, it feels like more bother than it’s worth. That’s not just friction. That’s a deal killer—especially when compared to sites that make the customer experience so much easier, while still protecting my digital identity. During holiday shopping, that’s a major competitive advantage.
The Power of Santa’s ‘Good’ List
Last year, ThreatMetrix saw firsthand how consumer activity intensified during the week leading up to Cyber Monday as retailers began offering deals ahead of the peak shopping days.
Among our findings: Of the 292 million transactions analyzed by the ThreatMetrix Digital Identity Network during Q4 2015, 75% of these came from consumers who were seen on the network more than once, and 40% were seen more than 5 times. Amidst these huge shopping volumes, we were able to recognize 85% of all returning customers, which helped businesses deliver great customer experiences by keeping friction low for trusted customers.
We were also able to rate 90% of the customers as low risk, which enabled businesses to transact in these massive volumes, without being concerned about the threat of cybercrime attacks. This is still a key challenge for a lot of businesses, so without a doubt, the ability to recognize legitimate customers was absolutely key to stopping fraud without impacting the shopping experience.
Be of Good Cheer—But Beware the Grinch
Indeed, analyzing data from the Digital Identity Network from previous quarters provides a unique vantage point to make informed predictions for Q4 2016.
We expect to see some huge transaction peaks for big retailers, possibly up to 10 times the daily average on key shopping days. According to the National Retail Federation, that could translate to over $117 billion in holiday sales.
However, sales may spike even higher. There are some indications that online holiday shopping traffic will remain high even beyond the usual peak days this season, as retailers attempt to maintain a strong momentum to end the year. Strong transaction volumes will come from logins and digital wallets as consumers rely heavily on previously stored payment credentials to make fast, frictionless transactions and secure the best bargains.
Speaking from personal experience, using my Apple wallet has been so beneficial for me when doing transactions, as it saves me from having to dig into my purse and find my ATM card.
In addition, around 50% of e-commerce transactions will come from mobile as consumers leverage the channel’s built-in convenience to make purchases.
But be warned: ‘tis the season when hackers have visions of cybercrime attacks dancing in their heads. And they’ll definitely attempt to capitalize on the upcoming spending frenzy.
- We expect to see around 50 million cybercrime attacks over the peak holiday week, with automated bot attacks figuring heavily into their schemes
- Fraudsters will use this holiday shopping season to try and sneak through higher value transactions, since they won’t raise the usual red flags because of the season’s generally higher cart values
- Broadly speaking, we predict these attacks will be on items that are 70% higher than average transaction amounts
While the holidays symbolize a time of joy and thanks, beware of cybercrime attacks that may add some bah-humbug that can ruin your holiday and endanger your customers’ digital identities.
To learn more about cybercrime trends found last quarter and holiday predictions for this season, download our ThreatMetrix Q3 2016 Cybercrime Report.
It’s a great way to prepare yourself and your business for the season ahead.
Let the online shopping commence!