Rising Cybersecurity Threats in the Middle East Retail Sector: Trends and Impacts
Retail establishments offering both online and physical services are increasingly targeted by cybersecurity threats using a variety of tactics to breach security systems. The Middle East’s expanding retail sector, encompassing both e-commerce and brick-and-mortar stores, has become an attractive target for cyberattacks. While past cybersecurity Threats often focused on the region’s lucrative oil and gas sectors, the economic growth of the Gulf Cooperation Council (GCC) and the digitization of retail make it a new frontier for cybercrime. Attackers employ sophisticated technologies to exploit IT infrastructure vulnerabilities and, in some cases, involve insiders copying data onto portable media.
A study by IBM in 2023 revealed a surge in cybersecurity breaches in the Middle East, with the average cost per breach reaching $8.07 million. This marks an increase from 2022’s average of $7.46 million and is notably higher than the global average of $4.45 million. The Middle East now ranks second only to the USA in terms of the highest average cost per data breach.
A recent report by payments platform Adyen highlighted troubling trends in the UAE’s retail sector. According to the report, 44% of UAE retailers experienced cyberattacks in 2023, a 15% increase from 2022. On average, these attacks resulted in losses of approximately $2.9 million per business due to fraudulent activities.
These attacks not only affect retail outlets but also have a significant impact on consumers. A survey by Fast Company found that 35% of UAE shoppers reported experiencing payment fraud in 2023, with a notable spike in cybercrime during Eid, when consumer spending surges. Additionally, phishing scams promising holiday season benefits and discounts are common tactics used to lure customers into malicious activities.
Below, we explore some of the most common cybersecurity threats and IT infrastructure vulnerabilities that threaten retailers:
1. Denial-of-Service (DoS) Attacks
DoS attacks aim to disable a retailer’s systems by overwhelming them with traffic, disrupting operations, and rendering services unavailable. Attackers may demand extortion payments to restore access. These attacks are particularly damaging for retailers, who rely on consistent system availability for smooth transactions.
2. Ransomware Attacks
Ransomware involves infecting systems with malicious software that encrypts vital data, followed by a demand for payment to decrypt it. Retailers are prime targets due to the sensitive customer and financial data they hold. Ransomware attacks can lead to operational disruptions, financial losses, and damage to reputation and customer trust.
3. Phishing and Social Engineering
Cybercriminals use phishing and social engineering to trick individuals into divulging confidential information. This can involve fraudulent emails, texts, or phone calls designed to steal login credentials. A notable case is the 2018 Marriott International breach, speculated to have begun with a phishing email introducing a Remote Access Trojan.
4. Network and System Compromise
Attackers exploit software and hardware vulnerabilities or use stolen credentials to access a retailer’s network and systems. An example involves a major retailer where attackers accessed an unencrypted central database via weak wireless network security, stealing sensitive personal and credit card information.
5. Point-of-Sale (POS) and Card Skimming
Criminals target POS systems to capture credit card details during transactions. For instance, a major food and beverage retailer was attacked with malware that collected card data from every transaction, affecting millions of POS systems.
6. Third-Party Vendor Compromise
Retailers’ reliance on third-party vendors can be a weak link in security. In 2022, malware was injected into extensions used by many retail eCommerce websites, highlighting the risk posed by third-party providers.
7. Advanced Persistent Threats (APTs)
APTs are sophisticated, long-term attacks designed to remain undetected. They often involve intricate planning and execution, with some attacks targeting older systems integrated post-merger, as seen in the Marriott breach.
8. Insider Threats
Insiders with access to systems pose significant risks, especially in the retail sector with high employee turnover. Employees or third-party vendors may steal sensitive data, as demonstrated by a case where a retailer’s employee sold over 8 million pieces of data over several years.
Conclusion
Given the rising incidence of cyberattacks, retailers must strengthen their IT infrastructure’s security. This includes implementing robust cybersecurity threats measures, enhancing physical security, carefully screening third-party vendors, and training employees on cybersecurity awareness. Proactive strategies are essential to safeguard against the increasingly sophisticated cybersecurity threats targeting the retail sector.
