Data Breaches: A Look Back, a Glimpse Forward

There are many different kinds of stories that dot the digital landscape, many highlighting the scope and reach of loss prevention in the new age of retail. Headlines dominating the digital space span both the globe and the imagination as loss prevention issues remain a prominent focus of retail dialogue. Some topics are new and fresh, some feel more like repeats of stories past, and still others will ultimately influence the culture and evolution of retail for years to come.

But one constant is that things tend to move quickly in the digital space, which also means that there are times when we may need to slow things down and take a closer look. While the headlines tend to catch our attention, there are often messages in the details that strengthen our resolve and give us insights on what is yet to come.

Data Dilemmas

As might be expected, data breaches have remained a dominant story for several years. With cyber-criminals coercing their way into retail data vaults across the globe, data breaches and similar insults are not only reshaping our data protection strategies and the boundaries of loss prevention, but also our very approach to the way that we pay for goods and services. Banks, credit card companies, and retailers alike are searching for more effective ways to protect critical information and the lifeblood of retail commerce. However, perhaps one of the data breaches that will have a more impactful long-term influence on the retail industry would not be classified as a retail-specific data breach.

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The unprecedented hack of Sony Pictures was one of the most damaging data breaches ever inflicted on an American business. Attacking the core of Sony’s business operations, the fallout forced Sony to cancel the widespread release of a major studio film. But in addition to the financial losses inflicted due to lost box-office revenue, Sony also faced astounding scrutiny as a landslide of sensitive emails and private and confidential documents were released online by the hackers.

The studio’s reputation was left in shambles as embarrassing revelations spilled from tens of thousands of leaked emails and other company materials. There is the cost of defending the studio against lawsuits by ex-employees angry over the breach, the impact on moviegoers angered by the quagmire of raw comments and poor decisions, and the damages that occurred as some actors refused to work with the studio. Political tensions even mounted in the wake of the breach. Sources claim that losses eclipsed $200 million as a result of the fallout.

Federal investigators believe there was a direct connection between the Sony hack and the spoof movie The Interview, which is the film debut that was cancelled. The movie featured a pair of journalists who were asked by the CIA to assassinate North Korea’s leader Kim Jong Un. While some may argue the “artistic” merits of filming a movie with such a distasteful premise or the intelligence of mocking a proud nation regardless of their political pitfalls, there is very little argument regarding the disastrous result.

What Does This Have to Do with Retail?

The answer lies in the reason for the attack. While the breach resulted in significant financial losses for the studio, the specific reason for the attack was not intended to be for the financial gain of the perpetrators—the incentive was retribution. The alleged hackers, who called themselves “Guardians of Peace,” also made threats of violence if movie theatres show the film. They claim the film was the reason for the breach.

The crystal clear reminder to the retail community is that those attempting to compromise our information resources may have incentives beyond financial gain. While the protection of financial and payment data is absolutely critical, we cannot afford to lose sight of the value—and potential liability—that can be tied to all of our sensitive information.

It’s certainly not out of the realm of possibilities that a disgruntled customer or employee might attempt to hack into our systems to release sensitive information that could cause significant damage and embarrassment to the organization. That also points to the need to remain diligent with the policies and practices designed to protect us from such insults and maintain critical security perspective in every area of the business.

Customers are looking at retail operations through a more critical eye, which threatens to change spending habits and personal choices in retail providers based on factors beyond the quality of our products. As a result we must always keep in mind that many of the challenges are much more far-reaching when it comes to the protection of our resources and the security of our data. Brand protection has added a new dimension in the face of company response. Customer service takes on a different perspective as well in light of threats that can jeopardize personal bank accounts as well as consumer preferences. All of this will continue to lead to significant changes in business ideologies, performance models, and company planning and structure as businesses respond.

Looking at how this will potentially impact the evolution of the loss prevention profession, it becomes critical that we are active participants in the solutions process. Rather than simply reacting to decisions, we should seek out ways to proactively contribute to the process as such decisions are being developed. Whether this involves reaching out and improving our partnerships, improving our base of knowledge, learning new skills, taking on new responsibilities, or simply sharing our thoughts and ideas, we will be expected to step up to the plate. It’s always better to prepare and lead the way rather than to wait and hope for the best.

To learn more, read the original 2015 LP Magazine article “A Look Back, a Glimpse Forward.”

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