High-profile data breaches affecting retailers including Target, Nieman Marcus and Michael’s have put information security into the mainstream, affecting sales and prompting Congressional hearings. As these breaches show, it is becoming increasingly difficult for businesses and technology companies to stay ahead of cyber-criminals.
The financial fallout and erosion of consumer trust continue to reverberate from Target’s disclosures in December and January that the personal and/or credit information of as many as 110 million customers was compromised after hackers reportedly installed malware onto the retailer’s point-of-sale machines through one of its suppliers.
On a conference call following the company’s fourth quarter earnings report February 26, Target CEO Gregg Steinhafel said the retailer is still analyzing what went wrong and is increasing the company’s investment in security. “This incident and recent security breaches at other companies have shaken [consumers’] confidence in both Target and the U.S. payment system more broadly,” he said. So far, Target has had $61 million in expenses related to its data breach with $44 million covered by insurance.
This article originally appeared on Knowledge@Wharton.
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