Pay Now or Pay Later: protecting customer data has to be a priorityTerry Cutler
By Terry Cutler
It is understood in the world of business moving forward without the Internet is an effective way to move backwards, and fall behind the competition who have already taken advantage of the Internet to market and sell their products and services.
It’s a logical move, one that seems easy enough. Create your site, reach out to your customer base and provide a way to pay online. It is fast and easy. It’s a bright light for decision makers who are making the leap in significant ways hoping to cash in.
Billions of dollars can be made.
There is a dark side, one that often surfaces when it is too late and one that is often overlooked. Welcome the unexpected scrupulous hacker to your business, and this person isn’t after your product; he’s hunting for your customer information such as credit card and banking information.
Billions of dollars can be lost.
And the hacker, often called a “black hat” knows something you don’t. Your business is cheap, or in the least do not have the funds when it comes to protecting customer data, and he knows more about your security and can worm and wiggle his way through your security system in ways you could never imagine.
Just how much of a threat is a hacker to a business?
The Ponemon Institute, considered the leading research center dedicated to privacy, data protection and information security, in March of 2011 demonstrated that costs to business being hacked in 2010 reached $214 per compromised record and averaged $7.2 million per data breach event. The costs included customer communication and legal costs, but the real cost is the loss of customer trust and the end of business.
In April of 2011, hackers exposed 93,000 Sony Corp. user accounts. The clean up bill to Sony is estimated to be $2 billion. Sony is also fighting 55 class action lawsuits related to the April breach. Sony’s insurers, Zurich American, are refusing to cover those costs.
Sony apologized to its users and launched an identity theft protection program that includes a $1 million insurance policy per user. Is it too late? http://www.techspot.com/news/43675-sony-ceo-apologizes-for-hack-offers-free-id-theft-insurance.html
So how do CEOs protect their companies? What every CEO should know, in my next blog.