Meeting Mentor Magazine

December 2018

Data Insecurity

Breaches Escalate With Growing Use of Big Data

Call it “data insecurity.” While companies and associations rely on ever more data for analysis and action, the security of that data is finally getting its day in the sunshine thanks to headlines about major data breaches. The Consumer Bankers Association and the Credit Union National Association peg the costs associated with the Target data breach to exceed $200 million. That’s likely to be just a first trickle with the coming deluge of data.

In just the past two years, 90 percent of the world’s data  — 2.5 quintillion bytes (that’s a 1 followed by 18 zeroes) — has been created. The digital universe in the U.S. alone is projected to double about every three years through 2020. Industries are rushing in to mine the the opportunities, with finance, retail, consumer products, manufacturing and health care seeing success from “Big Data” by the end of 2013.

No wonder more than nine of 10 Internet users in the U.S. worry about their online privacy, reported Harris Interactive research for TRUSTe. The reasons for their concerns:

— Businesses sharing my personal information with other companies (58% of respondents)

— Companies tracking my online behavior to target me with ads and content (47%)

— Reports of government surveillance programs in the media (38%)

— Privacy policies of Facebook and other social media sites (29%)

— Companies tracking my location via my smartphone (24%)

— Privacy policies of Google and other search engines (21%)

Their privacy concerns are a direct result of escalating reports of fraud. According to Javelin Strategy & Research’s 2014 Identity Fraud Study:

• The number of identity fraud victims reached 13.1 million in 2013.

• More than 6.5% of smartphone owners and 7.7% of tablet owners were defrauded in 2013.

• One in three people received a data breach notification letter in 2013.

• But the amount criminals stole decreased by $3 billion to $18 billion due to more aggressive actions by financial institutions, identity theft protection providers and consumers.

In February, representatives from the Federal Trade Commission testified before Congress for three days running about this huge issue for consumers, citing 16.6 million persons — 7% of all U.S. residents ages 16 and older — as victims of identity theft in 2012. The FTC is pushing for a strong federal data security and breach notification law.

The hospitality industry is not immune. In February, Reuters reported credit card data breaches detected at certain Marriott, Holiday Inn, Sheraton and other properties by hotel management firm White Lodging Services Corp. The company said information subject to potential theft by cyber criminals included names and numbers on consumers’ debit or credit cards, security codes and card expiration dates.

As you make plans to better protect your customers’ data (and your own), heed Experian‘s forecast of the top data breach trends in 2014:

• While the cost per record of a data breach is on the decline, breaches show no sign of slowing. Health care, energy, financial services, retail and telecom industries continue as top targets. Takeaway: Organizations must remain vigilant and prepared.

• With the advent of the “cloud,” data is now moving seamlessly across borders. This raises the potential for complex international breaches. Takeaway: Knowledge of a country’s regulations and compliance requirements will be critical.

• Investment in technology to protect against cyber attacks isn’t enough. Takeaway: As a financial remedy, more companies will purchase cyber insurance policies from a growing variety of options.

• With more frequent breach notifications, “data breach fatigue” in consumers may drive them to take fewer steps to protect themselves, leading to more fraud and identity theft. Takeaway: Clear communications and additional outreach to customers will be required.

• More state regulators will engage companies on data breach responses to help protect consumers from harm. Takeaway: Making contact early and often after a breach can help reduce the possibility of regulatory action. — Maxine Golding


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