Data Security Getting Better All The Time, Experts Say.

VANCOUVER, Wash. -- The uproar over online fraud could be a boon to Internet banking, according to one credit union information technology (IT) manager here.

Moreover, that's just one of many indicators that information security is getting better all the time, several credit union IT managers recently told The Credit Union Journal.

"Because it has been legislated that credit unions implement multi-factor authentication, the result may be an environment that is more secure, allows more activity to occur electronically and makes members feel more comfortable," asserted Jim Morrell, chief information officer at $350-million iQ CU.

Morrell pointed to a parallel in the electronic payments industry. Over the years, the Federal Reserve System's Regulation E may have bolstered credit card usage, he said. Regulation E spells out consumer rights and liabilities for unauthorized electronic funds transfers, including credit card transactions.

"Processing companies thought Regulation E was the death of credit cards, but activity actually increased because of the protections," Morrell said.

CUs See Steady Increase

Indeed, many credit unions are reporting a steady increase in online transactions, despite the fear that stronger authentication could result in a tedious or guarded online experience for members (CU Journal, Oct. 23).

It's not just stronger online authentication that has moved information security to center stage.

Well-publicized hacking attacks, including this year's at Chase Card Services, the Department of Transportation, the Department of Veterans Affairs and even some credit unions, have put members on the alert.

Awareness Up, But Threat Is Down

Morrell pointed out, however, that increased public awareness doesn't mean that the threat is growing.

"True, security incidents are getting more exposure, but the dollar amount to losses has gone down over the past year and a half," said Morrell.

"Online security is definitely getting better, not worse," agreed Jamie Valentine, network manager at $900-million University of Wisconsin CU in Madison, Wis. "You can't equate things getting worse with more people using the Internet."

Credit unions have put big money into defending member information both online and on internal networks, and it's paying off, added Don Thompson, vice president of information technology security at $3.2-billion Digital FCU in Marlborough, Mass.

"Attacks have been prevented, or have become more manageable, because of great improvements in practices and technologies to mitigate the threats," he said.

"Our security monitoring and prevention systems, together with our strong risk management practices, continue to thwart direct attacks on a daily basis," continued Thompson.

Spending on security will continue, Thompson said.

"Unfortunately the bad guy has migrated from a 'script kid' hacker intent on disrupting systems to a much more sophisticated criminal intent on financial gain," Thompson explained. "Staying ahead of the threat-curve will continue to require new technology which will increase cost and impact convenience."

Worst Threat Internal

The worst remaining threat to information security? Members and credit union employees, said Steve Koenemann, information officer at $360-million Vermont State Employees Credit Union in Montpelier, Vt.

"I think that, in general, things are improving," Koenemann explained. "The one concern that I have is not about the systems that help provide our security infrastructure but rather is about the people using the information behind those systems. There are some folks who haven't yet registered the notion of 'information security,' and it is these folks that we hear about in the press daily."

Morrell agreed: "The biggest worry at iQ CU is that an employee might inadvertently send out an email with confidential information to a third party vendor or a member."

Still, these executives remain optimistic. "We will stay ahead of the bad guys," Thompson said.

CUJ Resources

For info on this story:

* www.dcu.org

* www.iqcu.com

* www.uwcu.org

* www.vsecu.com

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