Changing with the Times: Cybersecurity in Collection

July 13th, 2017

Before the age of digital interactions and the development of computer software to handle the vast majority of our transactions, the U.S. economy relied on rolodex’s hard-copy storages for business operations. As the digital age progressed and people increasingly used credit cards and electronic forms of storage, business processes needed to change to maximize operational efficiency and to better protect from new, online risks. Before, a major risk was ruining a paper copy of a piece of confidential data; now, businesses have to worry about online vulnerabilities, as hackers are seemingly able to retrieve confidential information at will, which was recently displayed by the major global Windows Operation Systems hacks back in May. Maintaining adequate IT security is incredibly important in the 21st century, especially for ARM companies – whose entire business operation is centered on maintaining proper and confidential consumer information. Additionally, the ARM industry has become extremely technologically-advanced, with businesses utilizing complex products, such as IVR systems and CRM software, among other things, to run more efficiently. Lastly, with the CFPB and other government compliance agencies creating the enhanced compliance environment, it’s critical for ARM companies to monitor their cybersecurity infrastructure.

This point is further emphasized as U.S. consumers have become much more reliant on electronic forms of payment (e.g., debit or credit cards) in lieu of cash, as shown in the following graph. As additional confidential data is logged onto electronic software and devices, consumers and businesses become increasingly more vulnerable to cyberattacks.

Additionally and unfortunately, cyberattacks are quite prominent and, like a virus, are constantly transforming and growing to bypass our defenses. Let’s put this into perspective. In 2013, Deseret News reported that Utah’s secure government networks experienced upwards of 20 million attacks per day, up nearly 20-fold from “just” 1 million per day in 2011. Considering that massive two-year growth, please realize that this was already four years ago. Hackers and their technology have only gotten smarter and better since. Additionally, back in 2014, North Korea was accused of hacking into Sony’s database and leaking several confidential pieces of information, which led to President Obama enforcing sanctions against the country in response to the cyberattacks. In recent months, the WannaCry ransomware attack spread to computers in more than 150 countries, as more than 200,000 people fell victim to the outbreak. And lastly, as many of you are presumably well aware, U.S. intelligence and many members of Congress are confident and sure that Russia hacked into various election systems and software to help suede the 2016 presidential election in some way to favor Donald Trump. It is safe to say that the world sees hundreds of millions of cyberattacks each and every day. Take a look at the attacks happening in real-time (data varies between each site):

Specifically to ARM, attacks against the industry have been on the rise in recent years. Collection agencies have a lot of valuable information that hackers are looking to get their hands on, including customer credit card information and social security numbers, among other things. Another motive for the attacks against the industry could be anger towards debt collectors – a seemingly everlasting stigma. Many people are upset with how the industry allegedly treats consumers and, with new technology readily available and increased cyber/computer literacy among the populous, even amateurs may be taking a crack at it.

Long story short, just as it is important to have a fire exit strategy in your building or other business safety precautions, it’s critically important to have clear policies and procedures set and an adequate cybersecurity infrastructure in place to protect you from any kind of digital attack. With new innovations, there are always new risks and vulnerabilities to worry about. Welcome to the future ladies and gentlemen. Not as glamorous as you thought, huh?

Comments are closed.


The ED Procurement Debacle: Decision Made?

January 18, 2018

The Department of Education has made a decision regarding the procurement process and has awarded two new contracts. What do the experts think? Mike Ginsberg sat down with Randy Kamm to discuss just that in this two part, highly informative podcast! ....

» see this post    » all posts

Can I Determine the Market Value of my Business Before Going to Market?

January 16, 2018

The decision to sell your business should not be taken lightly. Before you respond to the next inquiry from an unknown buyer and potentially turn your business upside down, make sure you have a thorough understanding of your company's value.....

» see this post    » all posts

Another Successful Semester: Kaulkin Ginsbergs Fall 2017 Internship Highlights

January 11, 2018

Every spring, summer, and fall, the Kaulkin Ginsberg team selects highly qualified students in the Greater DC Metro Area to join our team as an intern for the duration of the semester. We strive to create a program that not only benefits our firm, but also provides unique opportunities for students, and this fall was no exception.....

» see this post    » all posts


Mike Ginsberg to speak at RMA's 2018 Annual Conference

January 9, 2018

Mike Ginsberg, president and CEO of Kaulkin Ginsberg, will be joining a panel of industry experts at RMA's 2018 Annual conference to discuss M&A and financing in the ARM industry.....

» see more

Kaulkin Ginsberg Company announces the addition of the U.S. federal government market segment on KG Prime.

December 5, 2017

As part of Kaulkin Ginsberg expanding market intelligence series on KG Prime, their market research team recently retrieved and examined data regarding the US federal government market segment.....

» see more

Kaulkin Ginsberg Company Teams up with Topline Valuation Group to Offer a New Valuation Service

November 21, 2017

Kaulkin Ginsberg, in conjunction with its sister company Topline Valuation Group, announces the release of a product that provides ARM company owners with an in-depth assessment of their company's strategic opportunities.....

» see more