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Data Snafus Spur IT Action: Bank Mishap Prompts Call for Network Backup

March 7, 2005 12:00 PM ET

Computerworld - Bank of America Corp. disclosed last week that it lost digital tapes containing the credit card account records of 1.2 million federal employees -- including 60 U.S. senators. Users and analysts said the mishap highlights the risk of physically moving archived data to storage facilities and will likely feed a movement toward network-based disk-to-disk backup systems.
The data loss, which occurred late last year, also prompted legislators to renew calls for national legislation similar to California's identity theft law, which requires immediate disclosure when customer information is compromised.
"The world has changed dramatically over the last four years, and the more you can eliminate the amount of data being transported around, the more you want to do that," said Bo Coughlin, vice president of Time Warner Cable Commercial Services, Raleigh (N.C.) Division. "I don't want Johnny to give a tape to Stevie, who then gives it to Paul, who puts it in his truck to transport it."
Coughlin is overseeing a project to offer subscribers a fully managed, WAN-based backup system to a central repository run by Arsenal Digital Solutions Worldwide Inc. in Cary, N.C. The company is also testing the Arsenal system for internal use, he said.
Coincidentally, Coughlin said he recently received a letter from Charlotte, N.C.-based Bank of America warning him that his personal account information may have been compromised.
Bank of America said it notified the U.S. Department of Defense and the General Services Administration on Feb. 26 that "a few" tapes containing account information for customers of the GSA's SmartPay travel cards were missing. Bank of America spokeswoman Alex Trower said the tapes were part of a larger shipment of media being sent to a backup data center. She wouldn't say if the tapes were stolen or whether the data was encrypted.
Turning to Technology
Bank of America isn't alone.
Richard Fischer, an attorney at San Francisco-based Morrison & Foerster LLP, devotes most of his time to financial privacy issues. He said that in the past three weeks, he has dealt with six cases involving banks whose customer information was compromised.
"Without any question, the banks have been under the microscope [of regulators] and have improved the security of systems," he said. "The problem is, the bad guys keep getting better too. The only solution is more technology."
Paul Rivard, director of IT at Commerce Bancorp Inc., a $1.2 billion company in Cherry Hill, N.J., said he moved away from tape backup for most of his servers three years ago and began backup over a



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