It’s 5 o’clock. Do you know where your data is?
Source: Business Korea
Data breaches have become routine. Last year Sony, JP Morgan, Home Depot, and several other major corporations had been hacked. This year Anthem and TurboTax have been attacked. Hundreds of millions of personal records have been compromised. Are data breaches inevitable?
For the moment, it sure seems that way. Government and corporate networks used to be separate. Foreign and domestic computers were distinct. Military and civilian systems were segregated. Now everything is lumped together in one big interconnected internet. Russian hackers living in Columbia use servers in Singapore to hack banks in New York. Geography doesn’t limit anyone any more.
We’ve all heard that we should use different user-names and passwords and change our passwords frequently. The fact that our online activity is becoming mobile means that our changes have to be input into multiple devices. It also means that we carry our passwords with us. This just makes everything more difficult.
But it’s not just about user-names and passwords. Data security is a mind-set, like living in a big city: you don’t carry much cash with you, and you don’t go down dark alleys. Currently, the best way to secure data is to erase it. If Home Depot hadn’t stored so much customer information, that data wouldn’t have been compromised. Companies should shred what they don’t need. We didn’t used to store everything forever. We need to get back to that norm.
There’s a pendulum in technology that swings back and forth from attack to defense and back again. It’s like warfare. Machine guns and trenches were a strong defense, until tanks and blitzkrieg tactics favored offense. At present, it’s a lot easier to mount a cyberattack than it is to defend against one. But that will change.
For now, the best defense against attacks is a quick, complete response. Resilient, self-adapting systems make life just a little harder for hackers. When everyone’s a target, we all need to improve continually. Sitting still makes us all sitting ducks.
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!