From a business perspective, is it cost-effective to improve security proactively?
Shuffling through your pile of mail, you come across an official-looking plain sealed envelope like the kind that your bank sends you. What now, you wonder? No one ever looks forward to a notice from the bank. It couldn’t be anything good.
You tear off the paper strip at the top and read a notice stating that your records at some company that you deal with had its records broken into, and it is believed that your records may have been compromised. You take some time to digest this information. The notice was written in a frank manner, devoid of any tone or emotion that would hint at the gravity of your situation. A few moments pass before you process that your personal information has just been stolen.
The notice, seemingly written by a lawyer, goes on to say that the company is now offering you one full year of credit monitoring services at no cost. You ponder what happens after one year. Will hackers forget about your stolen data after one year? Are the perpetrators going to be caught and your data privacy restored? Your identity, ability to access credit for home and school loans, your credit history, and your most personal data has been stolen. Your identity has been compromised, and you have not received a word of apology. Whoever sent this notice didn’t even sign the anonymous postcard.
That was my reaction three years ago when I received the first of such notices. Since then, I have received five more. The sting and surprise have dissipated by now. By the time I received my third notice and another offer for free credit monitoring, I was no longer paying attention. I barely gave the letter a cursory glance before throwing it in my filing cabinet with its siblings.
Do you wonder what companies are doing to harden their information systems to protect your information? There is no doubt that risk managers are assessing the odds of a data breach versus the cost of designing more resilient systems or adequately modernizing existing ones. While some improvements are being made, the cost and effort needed to rethink the security of a company’s systems are expensive. Many companies conclude that it is more cost-effective to do a few security tweaks and set aside money for public relations responses and free credit monitoring for its customers after the breach occurs. From a company’s perspective, it is a logical business decision.
Now let’s look at it from your perspective, the customer’s perspective. Think about how many companies you work with. All of them have some of your private information, and each company is playing the same probability game with your data. While the risk of a single company having a significant data breach may be small, the cumulative risk across many companies is high.
While it’s tempting to talk about more consumer protection regulations, this will not lead to meaningful change without employing better technologies to secure data.
Fortunately, blockchain is a new technology that could provide some answers. It decentralizes data storage and leverages multiple references or checkpoints to verify data integrity. The inherent security features in blockchain allow numerous parties to independently confirm the validity of data while also providing confidentiality and transparency.
If someone breaks into a company’s network, information can be stolen and easily read. However, blockchain technology adds a layer of protection because the data is encrypted. Without the correct key, hackers will be unable to read the information. If companies store data on the blockchain, hackers would have a harder time stealing and misusing your personal data.
Recently, I got an opportunity to have a word with Andrew Tang, CEO of Singapore-based company Fortacast, which is creating blockchain systems for banking, healthcare, and transportation. He said, “Think of all the situations where you would want assurance that your personal records are fully authentic and haven’t been tampered with. For example, consider your credit reports, bank transactions, and medical records. In addition, you would want control over who gets to see this information. There are numerous examples in the news of companies that failed to safeguard their customers’ data. The blockchain is one technology that could contribute to higher data security through advanced encryption features and immutability.”
In other words, you can trust data stored on the blockchain because it cannot be altered or changed without leaving a trail you can follow, contributing to transparency. The security comes from the ability to encrypt your data so it would be worthless to anyone who you did not authorize to view it.
The question now is how soon can companies adopt emerging technologies like blockchain to protect your data, and whether they can do it before hackers find new ways to steal it.
What’s your opinion about blockchain technology and its usefulness with regard to protecting critical business information? Let us know in the comments section.
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