When Target and Neiman Marcus suffered major hacking episodes during the Christmas retail season, the private sector realized that it had to come up with a way to combat hacking–and quickly.
It's too bad the federal government isn't responding as quickly and forcefully to the cyber attacks that breached the personal information of millions of federal employees because cyber security is going to be one of our biggest challenges in years to come.
My colleague Carrie Lukas explains what the private sector is doing:
Yet in-store breaches could be reduced immediately by taking advantage of available — and much more secure — point-of-sale Chip and PIN credit card technology. Some big banks and credit card companies are instead issuing chip only cards, which unfortunately don't provide as much protection as when cards are paired with a four digit PIN number.
Countries that have adopted Chip and PIN credit cards as the standard have witnessed a consistent decline in rates of credit card fraud — as much as 70 percent in the UK. The United States lags far behind in the move to Chip and PIN, but if the banks and credit card issuers embrace this change, consumer fraud could be reduced significantly.
More progress is needed, and our business community as well as our government should focus more attention on such security measures. Policymakers ought to recall that this — not providing transfer payments to millions of different groups of Americans, not regulating and micromanaging every aspect of life — is supposed to among be government's core functions. Government was created in large measure to protect property rights and prevent theft.
The sophistication of these chips is such that Dan Kaminsky, founder of White Ops, a company engaged in thwarting hacking, says using one is "like having a small computer on a credit card."
There is federal legislation that has been drafted to combat cyber theft. It would require the director of national intelligence to inform Congress of the countries and companies that engage in or support illegal cyber activity. The president would then be asked to block products from these companies from coming into the U.S. The idea is to stop illegal activity without impeding international trade.
As Carrie says:
Americans need an all-of-the-above strategy to reducing the damage caused by technology-based crime, which means that businesses, governments and all of us need to get involved.