Technology for MSMEs: With Covid-19 likely to have a huge impact on MSMEs in the next few months, businesses need to realign to evolving customer needs and implement secured, risk-free solutions that protect customers and partners.
- By Vipin Surelia
Technology for MSMEs: The pandemic that the world is battling today has propelled it to a digital-first approach – be it how organisations work or how consumers pay. Amidst this changing environment, micro, small and medium enterprises (MSMEs) need to take radically different approaches to go digital and operate smoothly, which will have a significant impact on the transformation of this industry. MSMEs account for almost one-third of India’s GDP and play a critical role in supporting their partners and providing a range of services to consumers. While the change in consumer buying habits has impacted businesses of all sizes, MSMEs have been hit harder than most. Wafer-thin margins and managing daily cash flows mean that MSMEs must seek quick and immediate paths to recovery as they navigate the economics of digital commerce without critical technology resources.
As businesses migrate to online platforms to meet consumer demand during these times, having a secure network to protect organisation and customer data should be a part of the technology backbone. However, this new focus on going digital also attracts bad actors. With most of the workforce now working remotely and with the increased use of digital services by new customers and businesses, online fraud attacks have increased by 20 per cent during the ongoing pandemic. While this exposes vulnerability arising from the lack of a robust IT infrastructure, businesses must strive to strike the right balance between digitizing their businesses and managing fraud risk efficiently.
As fraudsters attempt to exploit this window of opportunity, MSMEs need to reassess their risk strategy to combat cyber threats. Here are some of the important steps that can boost the risk health of a business and help MSMEs safeguard themselves against frauds while building a comprehensive fraud strategy:
- Invest in secure IT infrastructure: The global crisis has changed the way businesses function and has also led to a rising threat of cyber frauds and data breaches. With more customers moving to digital platforms and businesses increasingly using customer information and data, investing in robust IT infrastructure has become critical. Earlier, one of the biggest impediments for MSMEs to deploy complex IT infrastructure was the cost associated with it. However, in the digitally connected world and with SaaS (Software-as-a-Service), MSMEs will find it easier to implement necessary and critical IT security policies to combat growing cyber frauds.
- Beware of phishing attacks: Fortinet’s recent survey points out the increase in phishing attempts post the Covid-19 outbreak and websites claiming helpful information on the coronavirus have emerged as dominant threats. Phishing attacks can take many forms, with the most common being through emails. MSMEs can manage these threats by ensuring proper firewalls, allowing remote access only from known IP addresses, using the latest version of remote management applications and examining logs regularly for signs of unknown/suspicious activity. Additional measures like maintaining compliance with all security controls and educating employees about potential threats and raising alerts can be effective in mitigating organizational risks.
- Enable contactless deliveries: Most businesses now offer contactless or low-touch deliveries to protect their delivery partners and customers. While this is in line with the need to maintain social distancing and provide additional safety, it is also essential for quicker service when coupled with contactless forms of payment. However, this may lead to an increase in “goods not received” disputes for businesses. Hence, to reduce the possibility of disputes and chargebacks, MSMEs ensure that delivery partners take a photo as proof of delivery and thereby help defend against claims of goods not received.
- Order online, pickup in store: With strict directives on social distancing still necessary, MSMEs that have both online and offline operations should leverage this with an ‘Order online, pick-up in store’ delivery model. This model helps consumers avoid shipping fees and enables customers to pick up purchases in-store as per their own schedules. However, the lack of information on the customer shipping address and a few parameters of payment data not being captured could be a collateral risk.
- Check shipping details: As contactless deliveries gain popularity, fraudsters have started manipulating the shipping address on the checkout pages to unoccupied houses or new buildings, allowing them to pick up packages that have been left outside. While it is not possible to check every shopper’s address for validity, merchants should carefully check details in the shipping addresses that might be used to reroute packages.
With Covid-19 likely to have a huge impact on MSMEs in the next few months, businesses need to realign to evolving customer needs and implement secured, risk-free solutions that protect customers and partners. Secure IT and payments infrastructure will be the backbone for small businesses to operate better and eventually gain consumer trust in their platforms.
Vipin Surelia is the Chief Risk Officer, India & South Asia at Visa. Views expressed are the author’s own.