“Indeed, strong and sophisticated ITC [identity theft countermeasures] that needed more investments and more effort on the part of the adopting firm [were] heralded positively by the market because they provided additional layers of protection for the firm, and reflected that firms took security matters seriously,” the authors write.
Given the average costs of devices such as dynamic password generators ($35 to $40 per consumer) or brand monitoring and anti-phishing packages (about $70,000 per month, per package), there’s no question that the costs of protecting customers’ personal information add up for firms. But this analysis suggests that firms can quickly recoup their implementation expenses by announcing the installation of countermeasures, especially sophisticated ones.
Companies that announce they are installing countermeasures against identity theft get an immediate and significant boost to their stock price. Early adopters, firms that are very large or have high growth potential, and those that install more sophisticated safeguards get an even bigger bounce.
- Matt Palmquist is a freelance journalist based in Oakland, Calif.