Equifax, data security, privacy, and you

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The Equifax data breach is disheartening, enraging and….hmmm, so what? What does it matter what you think or do about such matters? Not much? Let’s pull the camera back and consider that question.

What is a reasonable reaction to data breaches and other manifestations of the rise of technology and big data when:

Here are six ideas to consider along with some further resources to keep you, your privacy, and your sanity better protected:

#1: Do what you can to protect your personal financial data even though you don’t own or control it.

Next Steps:

#2: Minimize how you are stalked on line.

Next Steps:

#3: Decide how you will shop.

Amazon, the poster child mega firm, knows how much you care about price, convenience, and selection, and it delivers on each front in spades mainly by going for scale. As NYU Stern School of Business Scot Galloway explains: Amazon has shifted the focus from managing for profit growth to managing at break even, while investors bid up its stock price. The result, Galloway asserts, is an immense advantage in free-flowing capital. “This technology-supported strategy of running a break-even operation while going for scale, without regard to short term profitability, also means that Amazon has virtually no profits to tax.” Galloway comments: “Something is deeply amiss when a company can ascend to almost a half-trillion dollars in market value—without paying any meaningful income tax. As of June 30, 2017, Amazon cash and short-term reserves were $21.45 billion. It has a dominant market share in online product searches, over half of the share of all books sold, a major and growing presence for voice on home devices, home delivery, and cloud computing, and is making swift inroads into the business of sales of fresh food and of original TV content, and now has a physical presence in Kohls stores.

What is a meaningful stance for individuals realizing that our (democratic) government at local, state, and Federal levels, is stressed arguably to the point of bankruptcy while Amazon has an essentially non-taxed cash reserve of $21.45 billion and commensurate lobbying power?

Next Steps:

#4: Be informed and ready to support the public conversation about regulatory updates.

Next Steps:

#5: Exercise control over the pace of your daily life.

The quickening speed of communication has brought transformative change in just a few years. For example, Hogan Financial, founded in 1992, was one of the first advisory firms to have a web page. It was part of an early NAPFA project to create awareness of the then very new service of fee-only advising. (Microsoft had offered to set up a directory of NAPFA fee-only advisors but only for advisors who were truly fee-only AND who had a web page.) At that time, advisors communicated by phone and regular mail and there was industry conversation about whether responding within the week was sufficiently fast communication. Today, advisors, like everyone else in modern commerce, struggle to engage appropriately with a daily river of email messages, many of which from sources expecting a near immediate response. That’s a change in the pace of daily business life.

Next Steps:

#6 Enjoy these fun reads that illustrate the key issues well.

The CIRCLE by David Eggers: In this 2014 fictional book, Eggers presents a witty, eerily prescient description of current conditions. The story line follows the life of Mae Holland, a new graduate, bursting with pride to have landed a post-college job with the easily recognizable, powerful internet company “Circle”. As her career unfolds you see the good, the bad, and the personal as a big tech “winner-that-took-all” company crashes forward to its logical destiny. NOTE: The movie version of this book did not earn as favorable reviews and, interestingly, also has a different ending than the book.

The Attention Merchants by Tim Wu: In this highly readable history, Wu tells the story of how our attention has been, with ever increasing speed and penetration, captured, influenced, harvested and sold, often with our unwitting cooperation and with thought-provoking consequences for society and for each of us as individuals. He starts the book with a quote from William James: “My experience is what I agree to attend to” and makes a strong case for a societal wide reclamation project to take back control of our time and attention from the media, both traditional and social.

As always, times are changing, and it is not appropriate or desirable to get stuck in bemoaning the passing of the ‘good old days’. But it may be timely for each of us—and for our government leaders—to be more proactive in shaping how our current lives are impacted by technology-induced change.

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www.hoganfinancial.com