Editorial
The Gist
- Data security. Effective data governance requires clear policies and robust leadership.
- Customer trust. Breaches can undermine marketing efforts, risking loyal customers.
- Cloud risks. Increased cloud data storage brings new challenges and threats.
As a long-time AT&T customer, I almost discarded a critical piece of mail from the company. I get a lot of email from them and other service providers — maybe too many pieces. To be fair, AT&T, like many telecommunications providers, is challenged retaining and cross-selling to customers — no wonder its CMO, Kellyn Smith Kenny, has the title of chief marketing and growth officer. The fact is AT&T is being disrupted from all sides.
Let's take a deep dive into the AT&T data breach and its impact on customer trust.
The piece of mail was titled "Notice of Data Breach." This incident underscores the risk of losing loyal customers due to poor management, despite significant marketing efforts to build brand equity. A negative experience, as noted by David Aaker, professor emeritus, Haas School of Business at University of California, Berkeley, can outweigh the benefits of marketing expenditures.
For this customer, the recent AT&T data breach could be the impetus for me, and possibly other customers, to for leave the company behind.
The AT&T Data Breach: What AT&T Says Happened
AT&T determined that my and other customers' personal information was compromised. On March 26, the company identified that critical customer data, including my name, address, email, phone number, social security number, date of birth, AT&T account number and passcode, had been released into the dark web on March 17, 2024. AT&T believes financial information and call history were not affected. I personally hope this is correct, but I remain worried.
In response, AT&T is offering credit monitoring, identity theft detection and resolution services. The company also says it is conducting a thorough investigation with internal and external cybersecurity experts and is reviewing and updating its information protection measures. And while AT&T has made the determination that there has been a massive data breach, it is not yet known whether the data in those fields originated from AT&T or one of its vendors, the company said in a statement.
By its own accounting, AT&T says: "Based on our preliminary analysis, the data set appears to be from 2019 or earlier, impacting approximately 7.6 million current AT&T account holders and approximately 65.4 million former account holders."
The data breach has ignited legal action.
Related Article: Effective AI Data Governance: A Strategic Ally for Success
What Likely Happened
As a data person, it's important to recognize that customer data is moving to the cloud. While cloud providers are generally better at protecting data from systematic threats, the sheer volume of data being stored in the cloud creates significant challenges. The inability to systematically detect, protect and remediate risks can lead to mass data breaches, as seen in the AT&T data breach case.
The increasing sophistication of cybercriminals exacerbates this issue. These bad actors target the data engineers and database administrators who create and manage cloud datasets, using phishing and other tactics to gain access to vast amounts of sensitive information. For many companies, these individuals mistakenly have complete access to cloud datasets, making them prime targets.
For marketing professionals, it’s crucial to ensure that your company has the right chief information officer (CIO) and chief information security officer (CISO) in place to protect your data assets. Without robust actions and leadership, even the best marketing plans can be undermined by data breaches.
Related Article: Customer Trust: The Backbone of Digital Age
What Needs to Happen at AT&T
As I mentioned, I will consider switching to a competitor that offers more robust data governance. To retain me as a customer, AT&T must establish clear data governance policies regarding data access. Understanding the current data posture is a crucial first step; AT&T needs to identify what data is stored and where it is located, which requires automation.
Remediating areas with large volumes of customer data is essential, as is governing everyone involved, including data engineers and database administrators. Implementing global data protection rules across all systems will prevent playing a constant game of whack-a-mole with customers' data.
This might involve appointing a new CISO and CIO focused on data governance. Too many current executives concentrate on building defensive perimeters in an era of increasing hybrid work, rather than addressing the core issues of data security and management that could help prevent incidents like the AT&T data breach.
Related Article: 6 Ways to Balance Customer Data Security and CX
Time for Marketing and CX Professionals to Take a Stand
How much money does AT&T spend on marketing, service and customer experience? All that investment has effectively been zeroed out in generating value due to the loss of customer trust. As the authors of “Rewired” suggest, it is time for managing risk and building digital trust, which involves at its core automating risk controls.
If I were Kellyn Smith Kenny, I would have the CIO and CISO in my office. A robust investigation supported by internal and external cybersecurity experts is not enough. I would demand to know what steps are being taken to systematically discover and protect sensitive data.
Questions that she should ask include the following: Have we enabled a systematic data governance solution to discover and then safeguard our customer data? If not, when will these solutions be implemented? Without these measures, spending another dollar on branding is not priceless — it is pointless.
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Parting Words on AT&T Data Breach
The AT&T data breach is a crisis moment for the company. It requires complete disclosure and transparency. Papering over the issue will not work. Addressing it requires significant investment and a thorough, not superficial, review.
To learn more on this, I have an upcoming article where I interview three security software executives on better protecting customer data. The fact is people like me will walk away; we will not tolerate poor business practices. This situation is fundamental to maintaining customer trust and ensuring a positive customer experience. CMOs stand up and be counted!
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