The financial services industry has failed in protecting consumers’ personally identifiable information (PII) data, according to a new research report from Needham-based TowerGroup.

In light of the loss or theft of hundreds of millions of data records containing PII, the financial services industry must consider the ramifications of past, present and future data losses, said TowerGroup’s Senior Research Director for Financial Information Security George Tubin.

The report indicates that despite significant media attention, increased state legislative demands, negative customer reaction and substantial costs associated with consumer data loss, millions of customer data records continue to be lost or stolen every month. Financial institutions must now assume that all of their clients’ and prospects’ personal information has been compromised or will be, the report added. More than 100 data breach incidents containing millions of data records were reported in just the first four months of 2009.

"While greater access to customer data is key for businesses to improve customer relationship management and business processes, there will always be repercussions, including the possibility of personal data landing in the hands of the wrong parties," said Tubin. "However, while the battle to protect data has been lost so far, TowerGroup firmly believes that the war can be won."