Inside This Issue - Opinion
Industry focuses in on lax data security
February 24th, 2014
It appears that members of the retail community are finally taking the problem of protecting the information that customers entrust to them as seriously as they should.
In the wake of the recent high-profile data breaches at Target and Neiman-Marcus, 14 groups from the retail and financial services sectors have forged a cyber security partnership to develop more effective defenses against hackers.
An outgrowth of discussions between the Retail Industry Leaders Association and the Financial Services Roundtable, the initiative has the support of, among others, the Food Marketing Institute, the National Grocers Association and the National Retail Federation.
"We are committed to working together to ensure customer personal and financial information is secure and protected," says RILA president Sandy Kennedy. "This partnership will improve collaboration across the payments ecosystem, allowing us to work together to develop near- and long-term solutions that will enhance security for our customers."
The organizations involved, their members and others with an interest in the issue will work on ways to share information to fend off cyber attacks, foster the development of innovative technologies that protect consumer data and help shape laws that relate to unauthorized incursions in computer systems.
The partnership should be a welcome step forward for every retailer. The scope of the disruption that a data breach can cause is illustrated by Target’s experience. In what were apparently two separate attacks late last year, financial or personal information linked to some 110 million shoppers was stolen by hackers. The crimes raised the specter of identity theft for affected consumers and put Target, one of the best mass retailers anywhere, on the defensive. The trust and loyalty that Target worked hard to develop over a period of many years came under threat within a period of a few weeks.
What happened at Target and Neiman-Marcus could occur anywhere technology is used to process payments, which is to say practically every retail establishment in the country. Hackers have succeeded in creating doubts about the integrity of the entire system. It’s good news that merchants and their counterparts in the financial services industry realize what’s at stake and are beginning to act accordingly.