What Do Data Breaches, Globalization and Unprotected Sex Have in Common?

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It is very likely that you or someone in your family has read a press report which included a quote, or received a letter containing one of the above now-hackneyed statements. The reason you have is because data breaches of typhoon magnitude are occurring with frightening frequency. In the last few months there have been several major breaches, like those mentioned above.

Unprotected Sex and Globalization

As I reflect upon all of this, two things come to mind: unprotected sex and globalization.

For years we have been warned that engaging in unprotected sex guaranteed that we were not only having intimate relations with the object of our affections but also every person with whom he or she had ever slept. Example: you think you are dealing with JPMorgan Chase, Citigroup, Target, Disney Destinations, Verizon, or Walgreen's. In actuality, their email is being managed by a third party. You believe the business with whom you're affiliated has employed strict security measures that protect the integrity of your information, yet in so many cases they are relying upon a vendor that may not practice the same stringent protocols, or does, but is sunk by the incompetence or carelessness of employees, or the evil genius of a sophisticated hacker.

Then there's the reality of globalization: the globalization of industry (which is why when you call your favorite institution's helpline you're talking to someone in India, Costa Rica, or the Philippines) and, the globalization of finance (which is why 20 percent of that single-family home mortgage in Kansas was blended with 10 percent of the mortgage on my friend's Park Avenue co-op, and sold to a financial institution in Copenhagen). In fact, the housing crisis was in no small measure caused by the fact that securitization of mortgages utterly removed the maker of the mortgage from the risk of nonpayment. All the institutions that bought that securitized polyglot of mortgages couldn't "know the customer." And, of course, the customer had no real way of knowing to whom he actually owed his monthly payment. This globalization has become ubiquitous, so that no one knows anyone personally anymore. It's also why there are probably parts of 100 different cows in that hamburger you're eating. If any one of those bovines had a problem, it will end up in 1,000 human diners.

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The spate of recent identity breaches is also the result of globalization—of information. You may provide personal data to an institution with which you have done business for years; but what you are coming to realize is that your data is likely being provided by your institution to many other companies, for marketing or e-mail communication purposes, or for who knows what else? According to the 2011 Global Security Report from Trustwave, 88 percent of data compromises originated with a third-party vendor, compared to 12percent for which the primary business was responsible.

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