360° Coverage : Defending Your Money

2 Updates
Defending Your Money
Photo Credit: Forbes Business

Defending Your Money

Dec 22 2013, 8:12am CST | by

We are at war. The war I’m talking about doesn’t use those cute, bloodless drones that wreak havoc on foreign soil…or deliver Amazon baby wipes. This war is invisible and far more subversive. And...

Filed under: news


42 weeks ago

Defending Your Money

Dec 22 2013, 8:12am CST | by

We are at war. The war I’m talking about doesn’t use those cute, bloodless drones that wreak havoc on foreign soil…or deliver Amazon baby wipes. This war is invisible and far more subversive. And you’re the target.

This week, Target  confirmed unauthorized access to as many as 40 million debit and credit card accounts. That’s a huge lump to swallow. But Target is not alone. You’ve seen this headline over and over again. And those are just the breaches too big to sweep under the rug. Like a pretty girl sitting at the bar, it’s just a matter of time before your data gets approached by a lustful stranger.

Every day foreign hackers, sloppy security practices, or nefarious employees jeopardize your data. From credit card numbers to brokerage accounts to good old fashioned checking balances. They’re all at risk. Companies have invested billions in stopping it, but no one stuffs the big fat data genie back in the bottle. Ask the NSA. What happens next will have a profound impact on consumers, businesses and careers. Keep reading.

Why is this happening?

All money is digitalMost don’t think about it this way, but money has been digital since direct deposit. When was the last time your boss unrolled a wad of cash to pay you? When have you been handed a check to deposit? When have you looked at a physical stock certificate? You log in online to check balances, pay bills, and make transfers. Even if you don’t, your bank and employer does. Your entire net worth and life savings are nothing but numbers (or credits) on someone else’s computer. The Fed can create more numbers from thin air. You have to earn them to see the balances go up.

All money is networked – Every bank and merchant is connected to internal and external networks to facilitate transactions and provide customer service. Those networks also create potential holes for intruders. It’s just the way it is. Sure, it’s harder to break into a house that has no doors or windows, but why would you live in it? Same goes for money. Companies need doors and windows to do business. But they must do their best to make sure Russian hackers can’t break in. (I’ll cover in a future article why it always seems to be Russians…) It’s a risk that can be managed, but NEVERcompletely eradicated like cockroaches. It means having diligent inhabitants (employees) and good locks. It’s in their best interest to do so -their reputations and future earnings are on the line.

Explosive economics – As e-commerce took off, we gave our data to countless online and offline merchants. We signed up for direct financial accounts with banks or brokers and indirect ones like Paypal, iTunes or Mint.com. Every one of those companies stores your data to make commerce more convenient. They also do business with more and more specialists that require access to that data to do their jobs. Specialists range from marketing services to call centers to payment processors. No single merchant can ever all of them on their own. This increased frequency of exchange and storage increases the likelihood of breaches – simply because of math. There are more rooms in the house, more windows to protect, and more residents who might someday lose their keys.

Authentication is a joke – Passwords are a joke when it comes to authentication. There are too many of them and the experience of adding 2-step authorization (texting you temporary codes) is terrible. This has led to lots of passwords on Post-it notes and “social engineering” to get people to reveal enough details to raid their account or create a false identity. The good news is this will change soon.

What’s next? Chaos and Opportunity

I don’t need to explain why bad people might want your money or credit card details. As with the drug trade, as long as potential rewards are high, there will be a market. That means a massive shift of resources towards data protection. Like what happened in the real estate and finance bubble, our best and brightest will be siphoned into the data defense business, instead of building better end-products.

There will be more breaches, most of which you’ll never hear about. And a constant cat and mouse game among companies, criminals, and consumers. No one will be immune. Not if you buy food, have a job, or live anywhere but a log cabin near Ted Kaczynski.

Hackers will always be one step ahead, as in all security scenarios. They are the rogueinnovators”. (It’s not unlike how porn drives innovation in e-commerce.) The good news is it will open the door for smart, nimble entrepreneurs to compete with massive behemoths that take years to modify their legacy systems. When I was at Citi in 2006, the company was still integrating acquisitions from the late 90’s!

Some of the big innovations I foresee include:

  • New digital currencies. (Though as I wrote in Forbes, it won’t be Bitcoin.)
  • A re-calibration national defense (and offense). Like we transitioned from tanks to drones and NSA data tapping, most future defense contractors will look more like Facebook (or “FacelessBook”) than Halliburton. It will should be cheaper for tax payers to fund and for entrepreneurs to build. Of course, we know that we won’t just be playing defense…
  • Most importantly, we will see a revolution in authentication – how companies identify you to authorize transactions. This means the death of credit cards, passwords, and 2 step authentication. (I’m writing a more detailed article on this based on work I did for a major payments company. Follow me on LinkedIn and sign up to my newsletter to get notified when it’s out.)
  • Data security will become a parameter on which many companies compete, like reception and network quality is for mobile providers.
  • Tech Veganism. There will be a movement of people choosing to opt out of the system and in the process, call attention to which companies go the extra mile to protect your data. It will usher in transparency and accountability similar to how GMO (genetically modified food) is suddenly on our radar.
  • Rogue do-gooders. Whether it’s Anonymous or others, there will be groups that hack their way for digital justice (or at least, their definition of it).

What should consumers do?

Consumers aren’t completely helpless in all this. As we transition to better technologies, I suggest a healthy (but not conspiratorial) level of paranoia. Here are some things you should do to improve your chances.

  1. Diligence. Review your bills. Make sure there aren’t any weird charges.
  2. Check your (free) credit report once a year.
  3. Close accounts you don’t need or use. The fewer entities can access your information, the better.
  4. If you have a credit card, I recommend never using your debit card for any purchases. ATM only. You don’t want something connected directly to your bank account sitting on a bunch of insecure databases. Call your bank and request a new debit card number. Trust me, it’s a lot easier to dispute a bad credit card charge than a deduction from your bank account.
  5. Don’t use social logins for accounts that involve financial information, ever.
  6. Create three levels of passwords - with increasing complexity:
    Level 1: Simpler – for accounts that don’t exchange any financial information
    Level 2: Intermediate – for accounts where you have a purchasing relationship like online stores.
    Level 3: Complex – for banking and finance transactions. Use different variations for each financial institution./>/>/>
  7. Change Level 3 passwords regularly. Once every 6 months is fine.
  8. Consider using a synced password program that works on your phone and PC. I like SafeWallet, but there are other good ones like LastPass. Personally, I only use the program locally and never in the cloud – even though it’s encrypted.
  9. Use 2-step authentication for other accounts
  10. If you’re lucky enough to have this problem, make sure you’re not keeping more money in an account than FDIC insurance can cover.


Teach your kids how to code. They should know how the sausage is made, even if it’s too late for you. There will be jobs in cyber security. The army already has a “terrifying shortage of U.S. Cyberwarriors. Of course, if you’re an evil mastermind, ignore this message and stay analog!

Finally, don’t forget to sign up to the IdeaFaktory newsletter for updates on my future articles or visit IdeaFaktory for help creating and commercializing innovations and Upcelerator for selling and acquiring startups.

Source: Forbes Business


7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company ( ...
Source: Business Times Singapore   Full article at: Business Times Singapore


7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the do ...
Source: Business Times Singapore   Full article at: Business Times Singapore


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Food pipe tissue grown from stem cells
New York, Oct 19 (IANS) Using a simple technique known as multiple combinations of cell populations, researchers have grown tissue of the oesophagus (food pipe).
How sperms compete to win
London, Oct 19 (IANS) In situations where a female copulates with several males in quick succession, only the best sperm, marked by speed, size and viscosity, wins the race to fertilise the egg, says a study.
Does the Saturn moon hide a 'fossil' core or an ocean?
New York, Oct 19 (IANS) A new study focused on the interior of Saturn's icy moon Mimas suggests that its icy surface cloaks either a rugby ball-shaped rocky core or a sloshing sub-surface ocean.
Obama gives calming message, says US prepared for Ebola
Washington, Oct 19 (IANS/EFE) US President Barack Obama delivered a calming message to Americans Saturday following the alarm sparked by the first two Ebola infections in the country, and said the nation is "prepared" to ward off an outbreak of the virus."

Latest from the Network

Bush shoe-tossing painting hits record at Doha auction
Doha, Oct 15 (IANS/EFE) A controversial painting by Iranian artist Mahmud Obaidi, depicting an Iraqi journalist throwing shoe in 2008 at then US president George W. Bush, was sold for $62,500 at a Sotheby's auction in...
Read more on Celebrity Balla
US offers $45 mn bounty for eight terror leaders
Washington, Oct 15 (IANS) The US said Tuesday it is offering rewards totalling up to 45 million dollars for information on eight key leaders of the Al Qaeda in the Arabian Peninsula (AQAP) terrorist organisation. The...
Read more on Politics Balla
UNSC extends peacekeeping mission's term in Abyei
United Nations, Oct 15 (IANS) The UN Security Council (UNSC) has renewed the mandate of the UN peacekeeping mission in the Abyei border region between Sudan and South Sudan. In an unanimously adopted resolution, the...
Read more on Politics Balla
Ebola cases in West Africa could reach 10,000 per week: WHO
Geneva, Oct 15 (IANS) The World Health Organisation (WHO) has warned that the Ebola epidemic in West Africa could reach 5,000 to 10,000 cases per week by the first week of December. "Quite frankly, ladies and...
Read more on Business Balla
Turkey, Singapore sign strategic partnership agreement
Ankara, Oct 15 (IANS) Turkey and Singapore have signed a strategic partnership agreement to boost economic, political and cultural cooperation, as well as security collaboration, during the official visit of...
Read more on Politics Balla
Christina Aguilera is returning to 'The Voice' USA
Christina Aguilera will return to 'The Voice' USA next year. The 'Your Body' hitmaker, who previously shared a rotating spot on the judging panel with Shakira, has been replaced by Gwen Stefani this season as she is...
Read more on Celebrity Balla
Kesha's music producer hits back
Kesha is being countersued by her record company boss, Dr. Luke. The 41-year-old music producer, who runs Kemosabe Records, claims the 27-year-old 'Tik Tok' singer is a liar and is trying to extort him after she accused...
Read more on Celebrity Balla
Jason Derulo won't get back together with Jordin Sparks
Jason Derulo insists his split from Jordin Sparks is permanent. The 'Talk Dirty' hitmaker, who recently ended his relationship with the 'No Air' singer after three years of dating, has ruled out getting back together...
Read more on Celebrity Balla
Josh Groban feels 'very lucky' to be dating Kat Dennings
Josh Groban feels ''very lucky'' to be dating Kat Dennings. The 'Brave' hitmaker was very nervous before singing in front of the '2 Broke Girls' actress for the first time at the Carousel of Hope Ball in Beverly Hills,...
Read more on Celebrity Balla
Australian Richard Flanagan wins 2014 Man Booker prize
London, Oct 15 (IANS) The first Man Booker prize to allow American nominees was Tuesday night won by an Australian, with Richard Flanagan triumphing for a novel of love and war that tells the harrowing stories of...
Read more on Celebrity Balla