Citi data theft represents a growing problem

Hackers broke into and stole customer data from the Citigroup databases. The company waited from early May to notify 200,000 credit card holders that their financial information was in the wrong hands. Now that this fact has come to light, Citigroup has a serious PR problem on their hands--in two parts. The first is an issue that all credit card companies are facing--that hackers are becoming more sophisticated than ever before and that Citigroup did not notify their customers at the time of discovery--putting the company's interests ahead of their customers' security.

Customers are increasingly feeling vulnerable as more and more major websites and online services fall victim to intrusions and theft. The credit card industry is plagued by this issue, and it may arise as one of the most poignant PR and branding issues of the day.

Financial institutions may come under fire by Government finger pointing and civil or state cases soon--especially Citibank for their delayed response. There will be questions whether financial institutions are investing enough in protections against attack. Certainly, there will be a push for uniform standards in data security as a result of this Citibank theft.