Erin - Articles - Internet Security and E-Commerce

Internet Security Issues

<*dv_0*> Luxembourg Business - March 2000

Trust is still the main concern in attracting customers and convincing venture capital investment for Business-to-Consumer services (on-line retailing). Trust in this sense covers on-line credit card payments, reliance on order completion, speed of delivery and more.

<*dv_5*>The USA has evolved over the past couple of years into an "Internet economy" where everything has a URL and one can purchase all kinds of goods on-line and expect high quality service in low prices and quick delivery. The Internet is a way of life in the USA.

In Europe, though, we are still a way behind in both the conception and launching of E-Commerce projects, as well as using these services on-line ourselves. Various issues have been identified, but only partly explain the disparity:

<*dv_6*> Traditionally, Europe lags behind the USA in Information Technology (there are exceptions, though - try telling that to the likes of Nokia)

Placing international orders is still not standard practice for European consumers

Marketing: the mistaken approach to launch E-Commerce initiatives based on traditional branding and marketing techniques. Marketing will become a much larger component of E-Commerce projects throughout Europe

Multi-lingual and multi-cultural differences place obstacles in consumers' paths

High telecommunications costs (per-minute telephone rates) in Europe, against flat-rate, or free, access in the USA

<*dv_4*>Contractual law and basic accountancy (both issues need more detailed guidelines, e.g. if someone in Luxembourg places an on-line order on an E-Commerce WebSite hosted in Ireland, for a service provider in Germany, and the goods are shipped from France and invoiced from the offices in Denmark - what law and invoicing regulations are to be adopted?)

<*dv_1*>Trust, including security (see above)

The area of Business-to-Business E-Commerce is a far larger market than Business-to-Consumer, and here the adoption of EDI, and in particular, EDIFACT standards to IP technology is crucial to the development of this market. With the secure integration of these technologies and standards will come reliance on the adoption and use of Business-to-Business systems.

Crackers and Hackers are other components in the set which makes up Internet Security. In recent months, many countries have had their fair share of Internet security breaches. For example, in Ireland, Eircom (telecomms operator), 98FM (radio station), the University of Limerick and others have been cracked, where the main pages of their WebSites were replaced by messages by the crackers, and signed with nicknames. Industry insiders view this form of disruption, as distinct from the malicious destruction of entire computer systems, as little more than electronic vandalism.

Recent reports of Denial of Service attacks on eBay, E*Trade, Amazon, CNN, Yahoo and many more well-known large on-line businesses, have rocked consumer trust and confidence, and have triggered extensive reviews of security procedures used in E-Commerce, as well as all Internet connections world-wide.

Some companies have reacted quickly and have researched and developed counter-measures to this new and apparently growing threat to the Internet. For example, AXENT (owner of Raptor suite of Firewall products) made available within a couple of days of these attacks, products which can detect and alert you tom the presence of these attack tools and techniques.

Reacting to these recent attacks, the European Commission published a press release on measures taken at a European level to fight cyber crime. The Commission "emphasised the crucial importance of consumer confidence and security in its recent e-Europe (Electronic Commerce) initiative". Furthermore, several initiatives have been taken, or are in the pipeline, notably the forthcoming Communication on cyber-crime, due to be presented before the summer.

This communication will put forward the ideas due to raise awareness of the need for use of effective security measures by service providers and access to the latest relevant technologies, including encryption. The Commission added that the EU Member States and the United States have already begun co-ordination on cyber-crime. "The recent WebSite attacks have served to focus attention on these issues and to create a sense of urgency to address these".

In the USA, the FBI, amongst other organisations, has initiated investigations into these Denial of Service attacks. While government action can achieve a certain amount of results, self-policing will need to be regarded as the best approach to defence.

Against the doom and gloom of the picture painted by the above facts, it is clearly evident that in many business areas, the adoption of E-Commerce solutions is the way forward. This is demonstrated here in Luxembourg, and elsewhere in Europe, with more banks offering Internet banking services. Whether the motives behind the arrival of such services are defensive or offensive, all organisation which foray into the E-Commerce marketplace has their own business and marketing plans.

<*dv_3*>Security for this business sector is paramount. Building customer confidence is crucial to the success of such financial sector's, as well as retail and other sectors', success.

A recent Belgian E-Commerce initiative, GiftsofCourse.com, has expanded its initial scope, and now offers a range of services via a multi-lingual interface, and without any geographical or cultural boundaries. What has been identified here, as well as in other case studies, is that a strong business case is required from the outset, but one which is flexible and can evolve to match market trends. Success has been achieved here with such an approach, which also encompasses a major security component.

<*dv_2*>The advent of WAP (Wireless Application Protocol) technology for mobile telephones is another breakthrough in the use of the Internet. Current devices need to call up a service (stock quotes, the weather, etc.), but soon will have these continuously available on-line. The aspects of security (data security) in this area remain the same for other Internet-based services.

As the volume of E-Commerce ventures grows, as well as the ever-increasing size of the Internet community overall, occurrences of security breaches will continue to grow.

While the potential risk regarding hacking, etc., should be seriously addressed in respect of all Internet connections, one must remember that the vast majority of fraud is committed inside organisations, and not from external hackers or other sources.

This article first appeared in the March 2000 issue of Luxembourg Business. It is the Copyright (2000) of International City Magazines (ICM S.a.r.l.) and we use it with their kind permission.