November 11, 2013 Articles

Data Breaches in Finance: Reviewing Exposure, from Litigation and Legislation

Financial institutions must be wary of hackers and unscrupulous employees alike.

By R. Andrew Patty II and Brook Thibodeaux

Financial institutions, such as banks, insurance companies, investment management firms, and payment processors, maintain a plethora of confidential, personal information. In today’s cyber-based society, data breaches present an ever increasing problem, and this industry is a prime target. As proof, a leading data breach study reported that 37 percent of data breaches in 2012 occurred in the financial services industry. Verizon RISK Team, 2013 Data Breach Investigations Report. In addition, the industry experienced the second highest per capita cost for data breaches, preceded only by the health care industry. Ponemon Inst., 2013 Cost of Data Breach Study: Global Analysis. One source has reported, as of October 1, 2013, there have been 19 data breaches exposing 351,089 records, as compared with only 18 breaches in 2012. ID Theft Resource Center, 2013 Data Breach Stats Report (Oct. 1, 2013).

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