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In today’s world, data is the new oil. Businesses everywhere compete to gather valuable data about their customers. This way, they can target them more effectively and boost their sales. Without customer and financial data, businesses cannot be successful. Similarly, data security is a critical facet of any thriving enterprise. As a result, companies funnel millions of dollars into advanced data security protocols to keep data theft at bay.
Nevertheless, we hear about security threats and data leaks from time to time. This time, the victim of a data hack is Robinhood, a popular investment application. The security breach exposed a considerable portion of its customers after hackers stole their data. This article covers the data security breach in greater detail.
Robinhood Markets, Inc. is an American financial services company operating from Menlo Park, California. It launched in 2013 and today aims to democratize finance for all people. Also, its focus is always on facilitating the customer’s needs.
The hallmark of its services is a commission-free investment. Also, it offers resources and tools that should provide customers with a profitable ROI. Some of the company’s services include stocks, funds, gold, cash management, and cryptocurrency. Lastly, Robinhood offers people the power to become investors without having millions of dollars to pledge.
About the Data Security Incident
Security breaches rarely occur in a company’s system. However, when they do, going public is the company’s best choice. Simply put, the enterprise has to talk about it with its customers and shareholders. And, this is what Robinhood did in the wake of the hack.
According to a blog on the Robinhood website, the company experienced a data security incident on November 3.
A third party conducted the breach and gained access to a considerable amount of the customers’ personal. However, Robinhood’s security personnel contained the cyberattack proactively. Therefore, the hackers didn’t manage to steal social security numbers, bank accounts, or debit card details. Moreover, it reports that the hack did not cause financial loss to any of its clients.
The total number of customers whose data was vulnerable amounts to 7 million. It seems that the hackers accessed Robinhood’s customer support interface by tricking a CS agent through social engineering. According to the intel, the third party gained access to five million email addresses and the full names of two million other people.
Additionally, the hackers gained access to the information of 310 customers, including their name, date of birth, and zip code. However, only ten of these customers suffered complete personal data leaks.
Robinhood also states that after detecting the intrusion, the unauthorized party demanded an extortion payment to restore the data. However, instead of paying the ransom, the company contained the breach and contacted law enforcement. Robinhood also enlisted the services of Mandiant. The external cybersecurity firm should help prevent the cyberattacks from occurring again.
As the investigation continues, Robinhood has issued security advisories to its customers. Also, it guides them on how to secure their accounts better.
What to Do After a Data Security Breach?
Robinhood may be trying its best to contain the cyberattacks and prevent them from happening again. However, no one can tell whether the breach can happen again or not.
In the age of cryptocurrency and blockchain, security is a significant concern that needs addressing. A few months ago, Japan’s Liquid Global Exchange lost nearly $100 million in cryptocurrency. The hackers moved the money into different crypto wallets.
Due to the rising number of crypto hacks and data security breaches, companies must reevaluate their data security protocols. A company like Robinhood, which helps people deal with their investments, has to worry about data security. If the data breach consisted of bank accounts and debit card numbers, it would have compromised millions.
Most companies have revamped their entire security infrastructure after encountering a hack. Also, some of them utilize the rapidly growing blockchain technology to safeguard their customers’ personal information. Furthermore, following million-dollar hacks, companies have introduced compensation plans to reimburse their customers.
For example, Cream Finance imposed this measure following a massive attack, where hackers stole $18 million. Therefore, the company implemented a refund process to help customers recover their losses. Lastly, it plans to use a protocol to reimburse the customers using 20% of the transaction fees.
Data security breaches can be quite concerning, not just for the customers but also for the company. After all, the latter is responsible for safeguarding millions of customers’ data. Therefore, it is high time that companies like Robinhood look into more efficient and advanced cybersecurity measures.