Alliance Data Systems

Cyber Governance Alert: Alliance Data Systems

ADS is a financial services company that is doing a poor job of managing its primary assets—data and digital operations. Available resources should be allocated to addressing the most pressing cyber weaknesses in the short term.

Why does cyber governance matter?

Alliance Data Systems (ADS) is a financial services company that is doing a poor job of managing its primary assets—data and digital operations. As both a card issuer and data provider for loyalty and rewards programs, the management of its digital technology is critical to its ability to deliver on financial and future growth targets. But its 1-Star cyber governance rating and performance since the March shutdown suggests the company is falling short. It is a worst-in-class performer relative to both financial services and technology sector peers.

What does the company need to do moving forward?

ADS is not currently over-leveraged and does have some cash reserves. Available resources should be allocated to addressing the most pressing cyber weaknesses in the short term. This should be done as a means of lowering the downside financial risk of an operational disruption or large customer data loss when the company can least afford it.

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Denis Bolshakov

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What are the Cyberhedge Cyber Governance Indices?

These first ever benchmarks prove good cyber governance matters to shareholder value. They measure stock market performance of companies with good and with bad cyber governance scores. Scores are based on Cyberhedge’s proprietary cyber governance rating methodology. Market performance is tracked by an independent firm. The results show that companies with good cyber governance outperform their peers in US, UK, and EU markets.

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