If appropriately managed, marketplaces can quickly generate large volumes of traffic and attract thousands of vendors, and their owners can rapidly expand their business and grow. For instance, the Walmart marketplace managed to double the number of registered vendors within a year, which exceeded the 100,000 mark in 2021.
On the other hand, running a marketplace business is risky since marketplaces store a lot of vendor and customer data, which always draws the attention of cybercriminals. According to IBM, in recent years customer data has become the most commonly compromised type of record, with each stolen record costing organizations $175 on average, not to mention reputational expenses.
Marketplace owners can avoid these adverse outcomes by taking measures to protect their data. In this article, we’ll provide you with several recommendations that can help keep marketplace data safe.
1. Take care of cybersecurity in advance
Typically, marketplace developers start thinking about the security of their future solutions, whether custom or platform-based, way before the actual development begins, because this way they can mitigate multiple potential risks in advance. Of course, every business case is unique, but there are some general aspects that should be considered before the start of marketplace development.
For example, when planning out a custom marketplace, the team should ensure the solution complies with local and international data protection regulations. Thus, if a company is going to operate on the European market, their marketplace software must comply with EU laws such as the GDPR. By designing a GDPR-compliant marketplace, the company will not only avoid fines but also establish a more secure architecture for their future solution and thus mitigate multiple vulnerabilities in advance. In view of the above, Data Processing Officers (DPOs) should be engaged in marketplace development as early as possible.
2. Run data security audits
Even the most technically advanced marketplace solutions cannot guarantee 100% security, as in our fast-changing world, software engineers simply cannot predict all possible threats. With hackers constantly coming up with new attacking techniques and legacy software growing obsolete day by day, unknown risks and vulnerabilities emerge. To protect customer data continuously, businesses should timely assess the state of their marketplace cybersecurity.
There are many ways to conduct such an audit. For example, companies can test the security of data during transmission and storage, review the network access controls and run penetration tests. What’s more, marketplace owners should conduct such audits as often as possible, at least once every couple of months, and repeat them after any significant software change.
3. Keep your marketplace up-to-date
Since cybercriminals often explore vulnerabilities in legacy software, updating a marketplace is essential for keeping it safe. If a company owns a platform-based marketplace, all their IT team has to do is check for updates and install them timely. As for custom marketplaces, updating them is more complicated and may require developers’ assistance in installing patches and updates.
4. Adopt a role-based permission model
Marketplace owners can implement a role-based model to divide all users into segments with different access levels. Thus, even if one user account is compromised, attackers won't be able to gain access to the entire corporate infrastructure.
The roles themselves may vary depending on the user's authority, responsibility and competence. For instance, regular customers can’t have access to all of the system units but to the ones related to purchasing. At the same time, marketplace owners and their teams can have full administration rights and share some privileges only with the most trusted partners if needed.
5. Back up data
As we already mentioned, even the most secure marketplace cannot be considered 100% safe. This is why teams should cover all the bases and back up valuable data that may be stolen in case of a successful attack. This way, companies can quickly restore their data and ensure no purchase or transaction that is critical to their business is lost.
The approach to data backups may vary depending on the specific marketplace software. For example, while leading marketplace platforms provide built-in data backup tools, custom marketplace owners may have to develop their own data backup solutions.
With the right approach, marketplace development can be a very promising investment, as such websites generate a lot of traffic and can be monetized and scaled. However, running a marketplace business is also risky. These software solutions store and process a lot of data, so they are often targeted by cybercriminals. In the event of a successful breach, the marketplace can lose its reputation, customer and vendor trust, let alone money.
Many cybersecurity risks can be mitigated even before a marketplace is launched. However, it’s still impossible to prevent them all in advance. To ensure the safety of customer data, marketplace owners should implement additional measures, such as regular data audits, data backups and a role-based permission model.