Davos executives see data theft as too costly, too hard to beat

DAVOS, Switzerland Fri Jan 24, 2014 8:11pm IST

The sign outside the Target store is seen in Arvada, Colorado January 10, 2014. REUTERS/Rick Wilking/Files

The sign outside the Target store is seen in Arvada, Colorado January 10, 2014.

Credit: Reuters/Rick Wilking/Files

Related Topics

Stocks

   
Election 2014

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

DAVOS, Switzerland (Reuters) - Fighting online data fraudsters is almost impossible as their ability to hack into new technology often outpaces companies efforts to protect it, senior businessmen and bankers gathering for the World Economic Forum (WEF) said.

The mammoth data breach at U.S. No. 3 retailer Target (TGT.N) has made executives even more aware of the need to improve safety standards, but the cost is often prohibitive.

"It's next to impossible to stop data leakage. It's a constant battle. You can't beat it completely," IT company Wipro (WIPR.NS) Chief Executive TK Kurien told Reuters, calling the hunt for increasingly valuable information "modern piracy".

While losses on complex derivatives transactions could punch a big hole in a banks' balance sheet or even compromise its stability, the potential losses resulting from the theft of retail customers' data are often minimal.

"Secure networks like clean pipes are expensive. You can use them for intellectual property but not for everything," Wipro's Kurien said.

With the rapid uptake of technology and hyperconnectivity both for personal and business reasons, people put privacy as their biggest concern with security ranking second, according to an international survey conducted for Microsoft (MSFT.O) and made public in Davos on Friday.

The more personal information is shared online, the more difficult the battle against fraud becomes, an issue that was already live following the NSA surveillance scandal.

Israeli Prime Minister Benjamin Netanyahu waded into the debate at Davos by championing the know-how of Israeli technology companies. With the government investing heavily in the area, Israel intended to become one of the top three countries for cyber-security, he said.

The WEF's annual global risks report, released this week, focussed on the worst-case scenario of a chronic breakdown of security, or so-called "cybergeddon", where hackers would gain the upper hand on legitimate users and major disruptions would become commonplace.

That eventuality is viewed by the WEF as a distant risk but there is no doubt that confidence is eroding following episodes like Target, which resulted in the theft which included about 40 million credit card and debit card records.

"Trust in the Internet is declining as a result of data misuse, hacking and privacy intrusion," said Axel Lehmann, Chief Risk Officer at Zurich Insurance Group (ZURN.VX).

The Target data breach, a major talking point in the Swiss Alps, triggered a flurry of customer inquiries, reputation.com CEO Michael Fertik, a U.S. digital pioneer who helps 1.6 million customers to protect their digital identities.

"We had lots of sign-up after the Target scandal," he said.

The incident has also put a spotlight on America's card system, which does not rely on the sort of chip and PIN technology that has been in place in Europe for years.

"Putting a chip in a card would make it much more secure. It's an organisational problem," a senior executive at a technology multinational said. "There is always going to be something more technologically advanced, but we could do things a lot better."

Bankers and businessmen say the historically low fraud rate in the United States has not encouraged banks and other financial operators to engage in what would be an expensive upgrade of the U.S. card system.

"It's a trade-off of what it is worth," a senior American banker said.

(Additional reporting by Ben Hirschler and Paul Taylor; Editing by Louise Ireland)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Microsoft

Microsoft CEO Satya Nadella speaks during his keynote address at the company's "build" conference in San Francisco, California April 2, 2014. REUTERS/Robert Galbraith/Files

New Microsoft CEO Nadella impresses Wall Street, stresses challenges

Microsoft Corp's new chief executive on Thursday won rave reviews for his first public encounter with Wall Street analysts who said he communicated willingness to transform the world's largest software company as it scrambles to catch up in the mobile-computing era.  Full Article 

REUTERS SHOWCASE

Lawsuit Settlement

Lawsuit Settlement

Apple, Google agree to pay over $300 million to settle conspiracy lawsuit   Full Article 

FB Newswire

FB Newswire

Facebook courts journalists with newswire tool.  Full Article 

Trend-Setter

Trend-Setter

Trend-setter Apple's stock split could bring out the copycats.  Full Article 

Bidding Adieu

Bidding Adieu

Google social networking boss Gundotra leaving company.  Full Article 

Amazon Results

Amazon Results

Amazon's revenue increases even as spending rises.  Full Article 

Internet Conference

Internet Conference

Internet industry seen as winner at global conference in Brazil.  Full Article 

Baidu Performance

Baidu Performance

Baidu forecasts stronger-than-expected second-quarter revenue.  Full Article 

Hacking Threat

Hacking Threat

All at sea: global shipping fleet exposed to hacking threat.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage