Bailout a Boon for Tech Security Firms

A handful of technology firms are primed to step in to repair a badly beaten financial industry.

After a $700 billion federal bailout and a vast amount of bad publicity, a growing consensus is emerging in Congress and with the two presidential candidates that financial firms will need more oversight.

In particular, the government is expected to target such areas as mortgage lending, loose regulations and unregulated markets.

But even before new regulations are in place, chief information officers in the financial sector will be grappling with the recent flurry of bankruptcies and mergers and acquisitions.

All this figures to be a boon to tech companies that can help firms improve their data security, update their archiving strategies and reform their compliance and management systems.

Security

The upheaval in the financial sector has underscored the importance of keeping track of data as companies change hands through a wave of acquisitions and government takeovers.

"What's happening with all the data that's being 'liquidated'?", asked security strategist Rafal Los on his blog Preachsecurity.com. "Those behemoths of Wall Street hold terabytes of information - PIA (personally identifiable information) of all types."

Los said he is particularly concerned about the ability of firms to ensure that data on disks and tapes is secured or deleted.

The financial sector is hardly a stranger to this type of data breach, even in stable times. The Bank of New York Mellon (BK), for example, recently lost backup tapes containing the personal details of some 12 million people, and the Bank of America (BAC) lost tapes in 2005 that contained personal information on 1.2 million federal employees.