In the aftermath of the massive security breach over last year's holiday season, Target Corp. (TGT) is now tightening its cyber security. The company will switch over to chip-and-PIN technology across its REDcard portfolio in collaboration with MasterCard Inc. (MA) and has also appointed Bob DeRodes as its new Chief Information Officer.
Target has partnered with MasterCard to bring in newer and more secure credit and debit cards in place of the cards using vulnerable magnetic strip technology. The new cards have digital chips to contain data, which generate a new code after every use and thus makes hacking difficult. The company aims to covert entire REDcard portfolio to chip-and-PIN technology by early 2015.
As a part of the endeavor, Target has already invested $100 million for the conversion as well as installment of support software at all its stores. The company is likely to complete the installation of the support software by Sep 2014, six months before schedule.
Further, effective May 5, 2014, Bob DeRodes will take over responsibilities of Target’s technology team and operations with special focus on the on going security up grade efforts. He will also be responsible for charting out a long-term digital and information technology blueprint for the retailer. Notably, DeRodes has served as a senior information technology adviser for the Center for CIO Leadership, U.S. Secretary of Defense, U.S. Department of Homeland Security and the U.S. Department of Justice.
Target is also looking for suitable candidates for the position of chief information security officer and a chief compliance officer.
Target faced its worst security breach when information related to credit and debit card data of approximately 70 million customers were hacked. The theft occurred during the holiday season, from a day before Thanksgiving up to Dec 15. The company publicly acknowledged the breach four days later on Dec 19, 2013.
As a part of the ongoing inquiry, Target had disclosed that the data theft included names, mailing and email addresses and phone numbers. Moreover, the company had extended help to aggrieved customers by offering one year of complimentary credit monitoring and identity theft safeguard.
The biggest security breach in U.S history was detected in 2007 when the leading off-price retailer of apparel and home fashions, The TJX Companies, Inc. (TJX) reported data theft involving nearly 90 million credit and debit cards over a span of about one and a half years.
Currently, Target has a Zacks Rank #3 (Hold). Another retail stock worth investment is Aaron's, Inc. (AAN), which sports a Zacks Rank #1 (Strong Buy).