Financial Services and Retail band together to fight Fraud
Finally, retailers and banks have agreed to work together to fight data breach incidents, foregoing the finger-pointing of who’s responsible for prevention and recovery.
This means both entities will work to improve technology that will protect consumers. Historically, the squabbling consisted of retailers accusing banks of being lethargic at adopting updated, more secure debit card technology; and banks insisting that retailers soak up more of the costs for card replacement following breaches.
However, despite the move forward of joining forces, banks and retailers will surely continue having differences. For example, the cost of getting replacement cards is “not something that the two industries are likely to agree upon," said Tim Pawlenty to Reuters; he’s chief executive of the Financial Services Roundtable.
So how did both parties decide to join forces? Pawlenty was contacted by Sandy Kennedy, the head of the retail leaders group.
This partnership will develop improved communication so that retailers can have a formal program regarding cyber threats. "We both viewed this as an opportunity to collaborate rather than to wage a public battle," says Brian Dodge of the retail leaders group.
In addition to card related breaches, the partnership will focus also on smartphone security. Use of mobiles to make payments has stunted progress between retailers and banks.
In fact, MasterCard Inc. and Visa Inc. have named a 2015 deadline to implement “chip and PIN” cards to replace the magnetic stripped cards that are so vulnerable to hacking.
Unfortunately, this switch is pricey, and both retailers and banks are not willing to be the first to take that dive off the high board. Especially since more and more people are using mobiles to make payments.
However, security for mobile users could reinforce the retail-bank partnership, says David Robertson, publisher of The Nilson Report. "We need to make sure that mobile becomes a secure way of doing business,” he says.
Robert Siciliano is an Identity Theft Expert to AllClearID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen See him knock’em dead in this identity theft prevention video. Disclosures.