ABA Banking Journal - September 2014 - (Page 6)

editor's column BY BILL STREETER A "Banks, of course, are not theme parks. Yet Disney's MagicBands are an example of WHAT PEOPLE WILL ACCEPT AND EXPECT" BILL STREETER bstreeter@sbpub.com 6| ABA BANKING JOURNAL | SEPTEMBER 2014 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 experience. 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 resources. 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 convenience

Table of Contents for the Digital Edition of ABA Banking Journal - September 2014

Chairman's View
Editor's Column
The Economy
Bank Notes
Picture This
Sales of insurance pay off
Pass the Aspirin
Payment trends: Threat or opportunity?
Working together to protect against identity theft
Tech Topics
Compliance Inbox
Around the ABA
First Person

ABA Banking Journal - September 2014

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