Pub. 3 2015 Issue 2

22 The Community Banker www.mibonline.org KEY UNDER THE MAT By Jack Hartings, Chairman of ICBA From the Chairman T he rejection of the recent MasterCard-Target settle- ment showed us some- thing that many of us commu- nity bankers have known for a long time—that pennies on the dollar is never a good deal for anyone. When Target agreed to reim- burse affected MasterCard-issu- ing banks roughly $19 million following the retailer’s mas- sive 2013 data breach, which incurred significant costs for thousands of community banks, it gave community banks a choice—either accept the mea- ger settlement or continue the costly and risky road of litiga- tion. As ICBA’s Cam Fine wrote in an American Banker op-ed on the subject, “talk about being caught between the devil and the deep blue sea.” Neither option was particu- larly desirable, and the rejection of the settlement proved it. This is certainly a case of, “it’s better if it didn’t happen in the first place.” And while we could wish that data breaches never happened, or were a thing of the past, we know that they are a very real threat to community banks and our customers. That’s why you know all too well why ICBA’s data security principles are more important now than ever. As community bankers, we know our customers, but it’s more difficult to protect them when we don’t see them at the point of transaction. We depend on systems that use logic and trends to spot irregularities, but they are never foolproof. While technology is amazing, it’s not always perfect. The same goes for cybersecu- rity. Community banks are held to an incredibly high standard in protecting our websites and sensitive information, and we should be—we, and most importantly, our customers depend on us. But it’s a chal- lenge for banks of all sizes. And as we have seen over and over again, cyber-thieves are always evolving. And while community banks can have the most secure systems in place, we can’t stop there. We need to continue to educate our customers to protect their passwords, login credentials and personal infor- mation. Not doing so leaves the key under the front doormat. And while business customers want 24/7 access to send ACH and wires, there is a cost and vulnerability associated with that. We live in a world where everyone wants easy, real-time transactions, but there is a tre- mendous cost to protect those user-friendly systems. While I know community banks are up to the challenge, we need to be more than a few steps ahead of the technology. We need to keep moving because cy- ber-thieves are lurking behind us. ICBA’S DATA SECURITY PRINCIPLES: THE COSTS OF DATA BREACHES SHOULD ULTIMATELY BE BORNE BY THEBREACHED PARTY. • All participants in the payments system— including merchants—should be subject to Gramm-Leach-Bliley Act–like data security standards. • A national data security breach and notification standard should replace the current patchwork of state laws. • Unnecessary barriers to effective threat- information sharing between law enforcement and the financial and retail sectors should be removed. • While community banks and other financial institutions continue to move to chip technology for debit and credit cards, these technologies alone may not have prevented the recent retailer breaches and do not protect against fraud in “card- not-present” transactions. We offer the SBA 504 loan program which provides the business owner: • Low down payment • Fixed interest rate • Long term loans P.O. Box 916 Helena, MT 59624 866.443.3261 www.mtcommunityfinance.org Partnering with lenders for over 30 years to help business owners expand in Montana. We need to continue to educate our customers to protect their passwords, login credentials and personal information. Not doing so leaves the key under the front doormat.