One day, it’s Sony. Another day, it’s Lockheed Martin. Now, it’s 200,000 Citi credit cardholders who have suffered a partial breach of their personal information after hackers managed to break into the Citigroup database. With over 11 million people hit with identity theft in the past two years, the U.S. government plans to invest $13 billion over the next five years on technology to battle cyber attacks. Though this investment is directed mainly to improving security for government data, many consumers worry that their online activities will also be placed under the microscope.
Online Security Versus Privacy
Internet security is not keeping up with the efforts of hackers to break into the networks of major corporations and even governments. Half of all Americans – 154 million people – have credit cards today. And as more people apply for credit cards and disclose personal information online, more are at risk of identity theft. Though the government is taking action to combat hackers, is it doing enough and is the private sector also falling behind the curve?
The breach of Citigroup’s database has the banking industry nervous. Regulators are looking at the problem of providing better security for online banking customers and credit card customers as recent hacking successes indicate a new level of sophistication and audacity. New rules will probably come out of Washington to force banks to make changes that they have been reluctant to initiate on their own.
In the Citigroup breach, names, account numbers, and e-mail addresses for about 1% of Citigroup card users in North America were stolen. Fortunately, information such as social security numbers and birthdates were apparently protected from these hackers.
Paul Galant, head of Citigroup global enterprise payments and former head of the bank’s credit card unit, said in April that security problems are part of the banking landscape. He believes that because hackers will continue to threaten the industry, the best banks can do is to monitor these networks more closely to ensure customer security.
“Security breaches happen, they’re going to continue to happen … the mission of the banking industry is to keep the customer base safe and customers feeling secure about their financial transactions and payments,” Galant told Reuters in an interview.
Gartner Research analyst, Avivah Litan, suggests that the banking industry could enhance security by adopting the use of a security token, a device which generates a string of numbers on an ongoing basis. Those numbers and a PIN number would have to be entered in order for a customer to verify his or her identity online. This proposal may be the solution to appease consumer apprehension about loss of privacy because this device is not invasive and helps fight cyber attacks. Something needs to be done quickly, however.
Anup Ghosh, Ph.D., chief scientist and founder of security software maker Invincea, and former scientist with the Department of Defense, said the hacking situation is clearly getting worse. “The adversaries are figuring out just how easy it is to get into the network."
Jason Collazo is a Columbia University student whose interests include economics, personal finance, and marketing.This combination of studies helps the writer shine a unique perspective on the U.S. economy, consumer trends, and business competitiveness. Jason is also a member of Columbia’s NCAA Varsity Diving Team.
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