As the ebusiness market continues to expand at breakneck pace, industry watchers warn that the issues surrounding internet security and fraud will pose more of a threat.
Legal expert Steven Philippsohn claimed that cybercrime accounted for half of all the fraud committed in the UK in the first six months of this year. But this figure is set to rise as criminals find new ways to breach online security, he claimed.
During the past year, UK companies have been hit by numerous viruses. One of the most devastating was the Love Bug, which cost firms hundreds of thousands of pounds after employees opened emails entitled 'I Love You'. This caused their systems to crash.
And as many as two out of three websites are vulnerable to cyber attacks, according to analyst organisation Gartner. As many as 5,000 had already been hacked by August this year.
John Pescatore, a senior security analyst at Gartner, said that intruders could, at the very least, change website content and in some cases even access information such as credit card details.
Well-known enterprises such as Woolworths, PowerGen and Barclays, for example, became victims of security breaches earlier this year when sensitive information about customer credit card details and addresses accidentally became accessible over the internet.
But one of the most infamous cases was the infiltration last month of Microsoft's corporate network. This sparked fears that hackers had been accessing the source code of the Windows operating systems and related applications for as long as 12 days. The vendor played down the incident.
Martin Saunders, security product manager for Northern Europe at Computer Associates (CA), said that although the Microsoft case was a special one, even for a company that experiences more than 300 hacker attempts a month, the online security threat is very real.
But firms have a range of options, he explained, including introducing special firewalls to prevent such security breaches as 'denial of service' attacks, which see firms bombarded with thousands of emails that are intended to stop trading.
"Integrated security is a must for ebusinesses. The piecemeal approach to security does not work because there are always gaps which can be penetrated by hackers," he said.
Saunders claimed that CA's E-Trust product "takes care of the mechanics", enabling firms to implement a standard, easy-to-understand security policy.
Companies that believe they are neither large enough nor important enough to consider introducing internet security should think again because they are the most likely to be targeted, he warned.
"If companies take an active approach instead of waiting for things to happen, they will be a lot better off in the long run," he explained.
Working on the premise that there will always be hacker attacks and security breaches, Saunders said it was possible for companies to function without facing a constant threat of disruption.
But according to research by Ipsos-RSL, which was commissioned by business intelligence tools company the SAS Institute, more than 62 per cent of organisations with a turnover of £50m or more have introduced no measures to combat internet fraud. As a result, a significant 84 per cent feel that the increasing use of the web makes them vulnerable to such fraud.
The survey, which was based on interviews with anti-fraud representatives from 100 firms, also revealed that 85 per cent believe anti-fraud systems are not only "good for the bottom line, but also for the company's brand image".
Only 36 per cent of organisations plan to introduce new measures to tackle the problem in the next 12 months, however, while 47 per cent have chosen to ignore the issue completely.
An inside job
Ian Kilpatrick, group managing director of distributor Wick Hill, said: "Firms should start considering security as a part of their business and business survival, not as an extra cost bolt-on."
This view was backed up by a Department of Trade and Industry survey, which showed that 60 per cent of UK firms had experienced at least one security breach in the past two years.
But because up to 75 per cent of all breaches are internal, firms should consider introducing mechanisms to secure their email and mail servers, said Kilpatrick. "With internal security, even if an outsider breaks in, they may not be able to breach the internal defences in the time available."
He added that security products such as policies, handbooks, departmental and remote user firewalls, intrusion detection software and content inspection devices, all offered good margins for the channel.
b>Writing is on the wall
And Naren Singapuri, managing director of online trading company ITXmarket, for one, is well aware of the need for internet security. ITXmarket, which has more than 5,000 member companies worldwide that buy and sell new, used and bulk hardware, is targeted at resellers and distributors such as Computer 2000, Aslan and Ingram Micro.
It enables partners to download inventories and also browse the inventories of other partners to ensure that prices remain competitive. But an alliance with Gerling Insurance Group and Trusted Trade GmbH has just been formed to provide members with insurance against non-payment because of the problems associated with fraud.
Singapuri said: "The need for firewalls and intrusion detection software is paramount because fraud is a major issue. We cannot afford to have hackers gaining access to sensitive customer information in our files."
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