FICO has compiled a comprehensive set of best practices for managing the risks associated with data breaches. These protective measures are based on an analysis of clients who have experienced breaches, combined with input from its internal IT security experts.
Consumers may enjoy the convenience of electronic banking, e-commerce and ATMs, but as the volume of financial transactions on computer networks increases, so does the risk that financial data will be compromised. A record number of data breaches occurred in 2012—a dramatic 48% increase from 2011 in the US alone—resulting in billions of dollars in fraud losses.
Instead of mobilizing forces into preventative efforts, the increase may be having the opposite effect. Data breaches are so commonplace that many consumers and businesses have become desensitized to the threat, especially in the financial sector. Businesses often don’t take appropriate precautions to protect their data, while consumers offered free identity protection following a breach don’t always sign up for it. Industry experts have coined this phenomenon “breach fatigue.”
Financial institutions have an obligation to safeguard their customers’ debit and credit card accounts and data. Industry and regulatory standards demand it. And there is more than short-term financial loss at stake. Companies that experience breaches invariably suffer damage to their reputations and lose customers.