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5 Ways Ecommerce Businesses Can Keep Their Customer Data Safe Data security in ecommerce is of utmost importance if you want repeat customers. Here are five ways to help ecommerce businesses keep their customer's data safe.

By Ralph Tkatchuk Edited by Micah Zimmerman

Opinions expressed by Entrepreneur contributors are their own.

The COVID-19 pandemic pushed almost every retail business online as customers embraced ecommerce wholeheartedly. While the move to digital channels gave many businesses new sales outlets, it introduced further complications. Data privacy issues and cybersecurity have become business pillars, and many companies have found the switch tough to execute.

Thanks to a raft of data breaches and unethical data-sharing practices perpetrated by big tech over the previous decade, consumers are highly sensitive to data usage. Ecommerce companies, irrespective of size, cannot claim ignorance as an excuse. Data breaches cause significant brand damage and erode consumer trust.

Here are five ways ecommerce companies can protect their customers' data and prevent costly data security lapses.

Examine data collection practices

Many companies collect large volumes of data from their customers without fully planning how they'll use these datasets. It is common for ecommerce companies to gather data directly from customers through forms and behavioral data from platforms. The rationale behind such data gathering is that more data is always better. This principle sounds great on paper but creates several vulnerabilities in practice.

For starters, asking for more data than is strictly necessary turns many consumers off since they recognize irrelevant data gathering. In addition, the more data you gather, the more you'll have to store, increasing your analysis costs. While cloud storage is relatively inexpensive these days, you must consider the hefty fees that come from future risks such as data breaches.

You are responsible for all the data you collect. A breach that involves data disconnected from everyday business exposes you to damage needlessly. For instance, you might be gathering customer interest data and failing to leverage it during analysis. A leak involving these datasets only damages your brand, and they served no business purpose in the first place.

Collect only what you need. You will gain more trust from your audience and reduce the risk of any data breach.

Related: 8 Ways a Data Breach Could Take Out Your Company Tomorrow

Examine payment channels

One-click checkout has become popular amongst consumers these days. However, this practice doesn't require storing customer credit card information on your servers. This is a violation of PCI compliance rules, for starters. Many companies tokenize card information and implement one-click checkouts using that process.

However, this method still exposes you to significant risks from a data breach. You'll also paint a target on your back for malicious hackers everywhere. Payments are a highly regulated industry, and breaching those laws will have severe consequences.

Thus, the risk-to-reward profile that one-click checkouts offer doesn't make sense for many ecommerce companies. You'll find that using payment facilitators or processors such as Stripe or Square makes more sense. You can outsource payments-related compliance to these companies while offloading brand damage risks in case of a data breach.

Review user access

How robust are your backend systems? Many ecommerce companies suffer data breaches due to malicious insider attacks. These attacks bypass cybersecurity protection since insiders have access to sensitive systems. Many cybersecurity solutions monitor baseline network usage to flag suspicious activity, but there's no guarantee that such alerts will arrive in time.

While it's almost impossible to eliminate malicious insider attacks, you can take a huge step toward preventing them by reviewing data access. Check who has access to your sensitive information and how well your data security is implemented.

For instance, customer data and identifying information should always be hidden using obscuring or masking techniques. These datasets should be accessed only by a small group of roles that have relevant customer-facing functions. Every other role should handle only masked data, whether that data is in production or development.

Review the access you provide contractors and other third-party tools. Integrating these tools and roles often creates configuration errors that can compromise data security.

Related: 7 Revenue-Killing Mistakes for Ecommerce Retailers

Implement 2FA

Two-factor authentication is essential to modern cybersecurity. Modern cyber protection relies on passwords. However, passwords are highly suspect, and an advanced AI engine can decipher them quickly. 2FA is the best way to protect your customers and their data.

There are many factors you can use when implementing 2FA. The most common factors are a password and a code sent to the user's personal device. Some users are reluctant to provide personal information; in such cases, a security question works well.

Another option you can implement is using an authentication app such as Google Authenticator. This method allows you to validate a user's device and identity without collecting personal information. Thus, you can build user trust while protecting them at all times.

Review your security protocols

No matter how robust your security is, review your protocols regularly. Is your team applying patches on time, and are your systems configured correctly? Often, security or system updates break older configurations, giving malicious actors an attack vector into your systems.

Reviewing user access to customer data is also standard practice. Make sure you review and revoke access when your employees leave your company. User IDs belonging to employees who have left, often called phantom users, offer hackers an easy entry point into your systems.

Compliance needs to change over time, so ensure your infrastructure is well-placed to handle new requirements. Review best practices in data security and change your processes to match them as needed.

Related: How to Secure your E-Commerce Business with Endpoint Protection

Data security is integral to ecommerce

Data security is an essential part of every ecommerce business. Online channels help you sell more products to consumers, but you must install robust data security protocols to win your audience's trust. Without that trust, it'll be significantly harder to scale your business or compete in modern markets.

Ralph Tkatchuk

Entrepreneur Leadership Network® Contributor

Data Security Consultant

Ralph Tkatchuk is a data security consultant and and an IT guy with 15 years of field experience working with clients of various sizes and verticals. He is all about helping companies and individuals safeguard their data against malicious online abuse and fraud. His current specialty is in ecommerce data protection and prevention.

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