Improving the Infrastructure of IoT for Fraud Frevention

The Internet of Things can be a great tool for preventing fraud at various points of payment, as well as within e-commerce. However, if not properly invested and secured, it can also be a great liability. Often, the best way to mitigate the risk of fraudulent activity is to encrypt the data. However, another liability is the fact that many machines lack an effective communication infrastructure. A hacker can easily exploit this to hide his or her presence while looking for ways to dupe the system and defraud businesses. Improving the mechanisms in which a company’s machines talk to one another can help strengthen security.

 

A different form of speaking

At the heart of IoT advancement is infrastructure. The way machines communicate with one another is quite different from how a consumer uses his or her smartphone, or even how a business interacts with machinery, according to the Wall Street Journal. Smartphones need fewer direct connections with the network they work with on a daily basis, but they send and receive a larger stream of data with each connection. On the other hand, smart devices that work in a networked setting need constant connections but far less data.

 

As a consequence, an effective traffic infrastructure will need to focus on connection reliability instead of bandwidth. Verizon currently looks to create a networking system in conjunction with Intel that favors strong communication for smart devices. While the telecommunications company looks to incorporate its 4G LTE cellular network as the backbone, other standards that could prove useful are Wi-Fi and the lower power ZigBee protocol.

 

Batten down the hatches

Getting the infrastructure right at this early stage of IoT’s development is important. Ars Technica reported that with many devices beginning to communicate with others, an exorbitant amount of data will travel over networks. The information collected makes IoT-enabled machines liable targets to hackers, especially as they use IP-based network protocols to send and receive. In a fraud-based scenario, an unscrupulous individual could tap into an insecure channel to see what data goes through, especially at a point-of-sale system. From there, they can create scenarios which businesses get duped payments. More importantly, they can figure out ways to collect customer data from which to base attacks. In ensuring that the networked devices stay secure and free from fraud, companies should take care to make sure their equipment is up-to-date and functional.