Transforming your business to include the online aspect can significantly impact its success. Not only can you reach more potential clients or customers, but you can also increase revenue while decreasing operating costs. Best of all, the process has never been easier due to the development of technology in recent years. Domino’s chatbot implementation to the use of Virtual Reality (VR) for healthcare or even AUDI’s innovative showroom are just a few examples of what digital transformation can do for businesses.
While these examples show you digital transformation is done right, the truth is that this process can often come with new dangers, especially if you are not mindful of them. Unfortunately, owning a business will always involve dealing with inherent risks, which is why we have listed the most common online dangers you might encounter. Every business owner must be aware of these dangers and the steps they need to take to protect their company.
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Copyright and Trademark Infringement
Copyright and Trademark infringement has always been present in the business, but it is more likely to happen online due to the sheer amount of data available. Not only is your business in danger of someone using your work without your permission, but it can even happen that you inadvertently use someone else’s copyrighted work resulting in legal persecution.
One of the most famous cases of copyright infringement happened in 1987. with Apple vs. Microsoft lawsuit in which Apple claimed Windows 2.0 shared too many similarities with Mac. Even though Apple lost the suit, the situation has resulted in decades of animosity between these two tech giants and their fans.
Trademark infringement is mainly connected with branding, such as a logo or brand name. While you wouldn’t willingly want to use someone else’s brand name as it might confuse your customers, it can happen if you do not take the necessary legal steps. Just take the US military, for example. The newly-established army branch, “US Space Force,” lost a race for filing a trademark application for the use of the “Space Force” name that Netflix is using for their hit comedy show.
Make sure those mistakes do not happen to you. Stay compliant with the law by researching online business name directories, educating your employees about using online content, and most importantly, understanding and following The Digital Millennium Copyright Act (DMCA) guidelines.
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Fraud
In 2021, more than 2.8 million fraud reports were submitted to the Federal Trade Commission, which accounted for a loss of $5.8 billion. This increase of more than 70 percent compared to the previous year shows that fraud is not going away anytime soon, making it one of the most significant dangers for any business.
What makes it even more dangerous is how versatile this threat can be. It doesn’t matter in which business sector you are in; your business can fall victim to different types of fraud, from account takeover, CNP, loyalty fraud to triangulation fraud, and many more. Every business is in danger, from the smallest startup to the biggest bank. Just recently, The Central Bureau of Investigation (CBI) discovered the biggest-ever lending fraud in India, where 17 banks were allegedly cheated out of around $4.4 billion.
It is easier to fall victim to fraud online, as fraudsters have more tools in their arsenal and can easily hide behind their screens. Confirming customer identity gets much more complex when you can’t physically confirm who they are. This is why it is essential online security is taken seriously, and all necessary steps are followed, from implementing cybersecurity tools, closely monitoring all transactions to ensuring all your systems are up to date. Taking a proactive approach is the only way forward.
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Data Security
Online security might not be one of the most glamorous elements of business, but it is actually one of the most important ones. Every business is constantly under danger of cyber criminals and hackers that try to gain access to sensitive information they can use for their benefit. According to Statista, over 53 million individuals were affected by data compromises in just the first half of 2022. When running a business, you are responsible for keeping all that confidential data safe, or you can face serious consequences such as financial loss or even legal persecution.
Luckily, you can take steps to ensure your business is protected from data compromises:
- Establish privacy policy
- Do not store unnecessary customer information
- Ensure everyone uses complex and unique passwords
- Educate your employees
- Implement cybersecurity strategy
- Keep your systems up to date
- Backup your data
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Dissatisfied Customers
Any business owner knows how dangerous dissatisfied customers can be, but the consequences can get even more drastic online. According to Esteban Kolsky, 72% of happy customers share their experience with six or more people, but 13% of dissatisfied customers will interact with 15 or even more. With the development of the internet and the broader reach of social media platforms, this number will only get higher.
While one unhappy customer doesn’t seem much, the number can snowball and cause financial setbacks. This is why you should try to solve any issues as quickly as possible and use those experiences to update your service. For example, if you have received several complaints about received items not matching the website description or delivery taking longer than promised, you can concentrate on solving those issues. A clear and easy-to-understand refund policy is also a must to ensure every customer understands the process.
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Reputational damage
This fifth online danger usually emerges as a consequence of a business being unable to prevent previous items on a list. Being involved in any of the last four online threats can damage your credibility and reputation, resulting in the loss of customers. Customers don’t want to do business with someone they can’t trust, and they feel they can’t trust companies being involved in copyright infringement, getting hacked, or having vocal dissatisfied customers. Protecting your company’s reputation is essential if you want to keep your customer and remain in business.
Take control of your brand image and quickly resolve any situation that might result in reputational damage to ensure you face minimal consequences. Remember, preventing these situations is always more cost-effective than dealing with the aftermath.
What’s the solution?
There is no one-size-fits-all solution that can help you prevent all online dangers you might encounter in your business. Every business faces different risks and needs to create an effective solution for them. Being aware of the risks is the first step you need to take, and then it is up to you to take all the necessary tools to ensure your business, and its customers remain safe in the face of the rising threats. Analyze your business risks and create a proactive approach that helps you prevent them before they can cause any damage.