SECURITY

Real-Time Analytics Takes a Bite Out of Crime

Alison Diana | Date: 11-11-11 | Comments

The increasing sophistication of cyber-attacks makes detecting theft and fraud all the more difficult. What�s often needed is the application of sophisticated real-time analytics to detect and flag anomalies.

Retailers, already worrying about the economy, inventory controls and staffing, are once again under attack by thieves.

After what was, apparently, only a temporary dip last year, retail shrinkage rose again in the 12 months ended June 2011. This loss came as a result of increased shoplifting, higher employee fraud and organized retail crime�and cost retailers around the world about $120 billion, according to the Centre for Retail Research at Nottingham University in England.

More than one-third of retailers reported that both actual and attempted shoplifting rose last year, and about one-fourth said they�d seen higher employee theft. Stores, of course, pass along expenses related to theft and prevention, which added up to an extra $66 per consumer or almost $200 per family, the Centre estimated.

In many cases, thieves are stealing from stores using stolen credit cards. Fortunately, retailers�and other businesses�are leveraging a number of technologies to prevent loss. To combat credit card theft, retailers need sophisticated analytics that can quickly detect and red-flag anomalies. Often, this software must respond in real-time because thieves often make purchases moments after stealing a credit card from an unwitting consumer.

Retailers must invest in these technologies to protect not only their wares, but also their reputations. In the recent Unisys Security Index survey, 90 percent of all respondents said they would take some sort of action in the event of a data breach, including 87 percent who said they�d change their passwords to 53 percent that would take legal action.

So what can and should retailers do to protect their inventory, their data and their customers� identities?

There are several solutions which must be integrated together to provide holistic coverage and security for all stakeholders. After all, protecting only part of the equation is not enough. Retailers�and all businesses�must safeguard information end-to-end, and that requires multiple solutions.

For example, retailers must adhere to the PCI Data Security Standard (or PCI DSS), common industry requirements for safeguarding cardholder data. Card issuers like American Express, MasterCard, and Visa aggressively enforce PCI DSS with financial institutions and merchants. Failure to meet these requirements can have widespread economic impacts for retailers and banks.

IBM designed its Payment Card Industry solutions to help businesses achieve and maintain PCI compliance in accordance with annual audits. IBM supports organizations through the five phases of PCI compliance. These are assessment, design, deployment, management and support, and education. IBM provides retailers and financial organizations with consulting services, advanced security technologies, and managed security services to ensure enterprise-wide compliance.

In addition to safeguarding credit card information once it�s collected, retailers want to ensure they are not allowing people to make purchases with stolen credit cards.

IBM InfoSphere Entity Analytic Solutions (EAS) helps retailers, financial institutions, and others fight fraud and identity theft through real-time analytics. For example, EAS detected on more than 20 occasions, that 22 individuals had been granted cards after they had applied and been rejected. One person applied 117 times with varying identity changes before the application was finally approved. Both scenarios were perpetrated within just 60 days. Placing EAS within the application process mitigates fraud, and reduces retailer and bank risk.