Data management and security could create huge problems in our increasingly-connected world, as two recent events have made evident: Earlier this month, a Knight Capital computer program unleashed a series of erroneous stock orders that resulted in a $440 million loss for the trading firm. Last week, journalist Mat Honan described in length how hackers, taking advantage of security flaws at Apple, Amazon and Gmail, completely wiped several of his Apple devices and commandeered two of his Twitter accounts.
The two events show that data management and security is taking a backseat as businesses and consumers strive to stay connected. The New York Times reported that Knight Capital rushed to develop the faulty software to take advantage of computer-driven market and failed to work out problems with the system. In his frank, detailed description of the events that led to his “epic hacking,” Honan admits he is very much to blame for his inattention to security. But he also notes the apparent IT security disconnect that people — and corporations — often forget when technology is used across developers and platforms.
“Apple tech support gave the hackers access to my iCloud account. Amazon tech support gave them the ability to see a piece of information — a partial credit card number — that Apple used to release information,” Honan wrote. “In short, the very four digits that Amazon considers unimportant enough to display in the clear on the web are precisely the same ones that Apple considers secure enough to perform identity verification.”
At least some are paying attention to the potential risks: Apple announced it had stopped allowing over the phone password resets, and Amazon announced fixes to its security policies after Honan’s hacking went public. In response to the Knight Capital debacle, SEC officials are pushing for new regulations around trading technology.
But more consumers and businesses need to realize these data management and security concerns are not going anywhere — and will likely get worse unless they take the necessary steps to protect themselves. In the struggle to stay ahead of the next guy when it comes to the latest IT gadgets and tools, security should stay a primary concern or, as Honan and Knight Capital can attest, more will suffer the personal and financial consequences.