30 Apr Target hires DeRodes as CIO, speeds tech enhancements
Target Corp. reached outside the company for a new top technology executive after experiencing one of the worst data breaches in U.S. corporate history, saying Tuesday it hired Bob DeRodes as chief information officer.
DeRodes held similar positions at Home Depot, Delta Air Lines, Citibank and First Data. Most recently, he has served as a data security consultant for several U.S. government agencies in Washington.
DeRodes will begin work at the Minneapolis-based retailer next week. He succeeds Beth Jacob, a Target veteran who resigned in early March, little more than two months after the company revealed its point-of-sale system had been breached by cyberthieves who gained access to the financial information of tens of millions of its customers.
The breach, which happened during the busy holiday shopping season in early December, damaged the company’s reputation and hurt its financial performance as customers drifted away from Target stores. The company protection against losses that consumers may suffer because of the stolen information.
Also Tuesday, Target said it would have new point-of-sale terminals in its stores by September, six months faster than previously announced. And it said it was working with MasterCard to roll out more secure versions of its Target-branded credit and debit cards.
“Establishing a clear path forward for Target following the data breach has been my top priority,” Gregg Steinhafel, Target’s chairman and chief executive, said in a statement. “I believe Target has a tremendous opportunity to take the lessons learned from this incident and enhance our overall approach to data security and information technology. Bob’s history of leading transformational change positions him well to lead our continued breach responses and guide our long-term digital strategy.”
DeRodes, 62, will take charge of improving Target’s technology infrastructure, including the implementation of so-called “smart” cards that have digital chips in them for enhanced security. “It is clear to me that Target is an organization that is committed to doing whatever it takes to do right by their guests,” DeRodes said in a statement.
The company also plans to hire a chief information security officer and a chief compliance officer.
Target said the $100 million plan to roll out chip-based credit card technology in all of its nearly 1,800 stores had sped up. The new payment terminals will be in the stores by September and, beginning in early 2015, Target will be able to accept these payments from all of its Target branded credit and debit cards. Existing Visa Inc. cards will be reissued as MasterCard co-branded chip-and PIN cards.
“Target has long been an advocate for the widespread adoption of chip-and PIN card technology,” said John Mulligan, executive vice president, chief financial officer for Target in a statement.
While magnetic strips transfer a credit-card number, chip cards use a one-time code that moves between the chip and the retailer’s terminal, resulting in data that is useless except to the parties involved. They’re also regarded as nearly impossible to copy, at least for now.
But naysayers say that the protections chips provide only go so far, noting that they don’t prevent fraud in online commerce, where consumers still have to enter their credit card numbers. Some also point to other technologies as better long-term solutions.
In March, Visa and MasterCard announced plans to bring together banks, credit unions, retailers, makers of card processing equipment and industry trade groups in a group that aims to strengthen the U.S. payment system for credit and debit cards. The initial focus of the new group will be on banks’ adoption of chip cards.
That comes ahead of a liability shift set to kick in October 2015. When that occurs, the costs resulting from the theft of debit and credit card numbers will in most cases fall on the party involved with the least advanced technology.
Evan Ramstad — 612-673-4241
The Associated Press contributed to this report.