ABA Banking Journal - September 2014 - (Page 6)
BY BILL STREETER
"Banks, of course, are not
theme parks. Yet Disney's
MagicBands are an example of
WHAT PEOPLE WILL
ACCEPT AND EXPECT"
ABA BANKING JOURNAL
recent story in The Wall Street
Journal cited an uptick in sales of
flatbed credit card imprinters due
to data breaches.
Cyberfraud, data breaches, hacks,
malware, identity theft, and the whole
nefarious mess poses a very serious threat
on many levels. Will people pull back en
masse from the use of digital means of
exchange and commerce? Anything's possible, but it's unlikely. As an approximate
analogy, the mass adoption of automobiles
led to a wave of accidents and injuries,
yet people did not stampede back to
horse-drawn carriages or walking. They
liked the convenience too much-and
The same is true with e-commerce. If
you doubt this, visit Walt Disney World
in Florida. The entertainment giant has
spent over a billion dollars developing
and installing MyMagic+, a highly sophisticated electronic system for entry,
identification, and payments.
All visitors to the Magic Kingdom,
Epcot, and other venues within Walt
Disney World now enter using a Disneyissued card or a wristband called a
MagicBand. Going by recent firsthand
experience, the vast majority of park visitors wear MagicBands. Given that Disney
visitors come from all over the world, from
all backgrounds and age groups, this is a
striking statement about people's love of
"cool" devices and what they can do. And
the colorful wristbands do a lot.
Embedded with an RFID tag they
are used as a hotel key, a park pass, a
FastPass+ card (Disney's system to help
manage line wait times), a payment device
(used with a PIN), and even to download
photos taken by Disney photographers.
Banks, of course, are not theme parks.
They represent an industry, not one corporation with a closed system. Yet Disney's
system is an example of what people will
accept and expect.
As Gerrard Schmid, CEO of bank technology company D&H, observed recently,
"All of us are being held to new standards
of convenience." He added that banks are
compared not only to each other but to
companies outside the industry.
Clearly the millions of visitors to Walt
Disney World have such an expectation
for a convenient, integrated experience,
despite multiple data breaches. Would
that change if Disney were hacked?
Almost certainly, yes, to some degree. The
system has multiple layers of security, but
any firm operating in the digital world-
which is the great majority-should know
what's at stake and commit the necessary
To borrow a phrase we read recently,
there is an "arms race" between the cybercrooks and digital developers. It will
never end. Unlike the auto industry, which
for many years resisted implementing
safety measures, banks must not only
meet the challenge of competing in the
digital world, but continue to lead the way
in protecting customers' assets.
PHOTO: KENT PHILLIPS
There's no stopping
Table of Contents for the Digital Edition of ABA Banking Journal - September 2014
Sales of insurance pay off
Pass the Aspirin
Payment trends: Threat or opportunity?
Working together to protect against identity theft
Around the ABA
ABA Banking Journal - September 2014