ST. PETERSBURG, Fla.—Will credit unions soon need to be educating their members about the financial risk presented by their refrigerators?
One analyst says the answer is yes, citing the ever-expanding connectivity of the Internet of Things and the ever-expanding risk from hackers to new targets.
“You are seeing all of these new connected devices, like refrigerators that will order eggs when you run out,” said Brian Scott, senior vice president of business alliances at PSCU. “Or the ‘Buy’ buttons from Amazon. Stick one of those on your washer and when you run out of Tide just press the button and an order is sent to Amazon. And then a new supply of Tide is on your doorstep in less than a week.”
While the Internet of Things certainly makes consumers’ lives easier, it also simplifies crooks’ ability to steal payment credentials, said Scott.
“The fraud byproduct in this is that now it is potentially easier for criminals to hack into your accounts,” said Scott. “All of these devices that order for you have your payment information in them.”
The Main Problem
The main issue, contends Scott, is that people install sophisticated anti-malware software on their computers, savvy consumers have protection on their smartphones, but few are really thinking about their refrigerators.
“Anymore, you have to stop and think about all of the endpoints where your payment information can be reached,” said Scott. “You really have to protect every connection endpoint.”
Scott said during a recent payments conference that analysts estimated that it won’t be too long before the average consumer has 30 to 40 endpoints where someone could breach their payment data.
Scott said credit unions have been good at educating members about how to protect their cards and secure their digital wallets. He also noted that as more consumers become fraud savvy they want to be part of the fraud fight and use card control solutions, which Scott said more credit unions are making available to members.
A Need to Expand Education
But Scott feels it’s time that credit unions’ educational efforts expand to address the Internet of things.
“It’ now time to talk to members about the less common places their data is stored,” said Scott. “Let them know that these Internet end points need attention as well. Because as cards and digital wallets become more secure, fraudsters are now realizing there are easier paths to stealing that same data.”
Scott said that while it may not be possible to place anti-malware software inside the refrigerator, Internet firewalls provide a solution.
But what could be wisest today, said Scott, is to make sure the payment data an IoT device accesses is not the primary credit card—perhaps a card that carries only a certain amount of cash.
“My wife and I take that approach with the items we buy on the Internet,” said Scott. We have a separate card for those purchases. But what is most important in all of this, and the most important message credit unions can share with their members, is that they need to be aware of where they are placing their payment data. And today, that is in a lot more places.”