Financial Information, the Internet and the Health Club Industry

National Fitness Trade Journal - Fall 2004

Chances are the Internet has become a part of your daily business. Today's business, in one form or another utilizes the Internet as a means to conduct business, move files, and communicate with present and future clients. It has become the number one most utilized network in the world! The backbone of the Internet is the most reliable cost efficient means of transferring information in the 21st century. Chances are if you don't utilize the Internet in your business, you are at a disadvantage in the marketplace.

When it comes to information technology and the speed in which it moves; the Health Club Industry is at the forefront of taking advantage of this convenient way of doing business. Every part of our industry is benefiting from this, from advertising and price quotes to closing a deal. We are conducting transactions over the Internet on a daily basis.

The excitement and the rush to do business over the Internet has subsided, due to the fact that is has become a "normal" accepted practice to design a web site and network to run over the internet. Most companies have done this and the backlog or "rush" to beat your competitor has ended. Either you use the Internet in some form or fashion or you don't compete.

But have you ever wondered what happens to your information when you hit "send" or "enter"? How safe is this information? Where does it go? How fast does it travel? What happens to it when it reaches its destination? What then? Does the information travel again?

Today, we are moving sensitive financial information back and fourth as a way to create financial debits and credits to pay our bills and establish the credit we need to do business with our creditors. This is a perfectly accepted practice.

Health Clubs survive on the ability to collect as many payments from as many members as they can to create operating revenue and profit. Processing and collecting payments has become a very automated and technical process. Members provide financial information via their checking account and credit card and the authorization to debit these accounts on a monthly basis for services rendered. The health club then enters this information into a system (third party billing company or equivalent) that creates these debits and in turn sends this information to a financial institution (bank or clearing house) for processing.

This financial information and the way it is moved and ultimately stored at its destination, has become the sensitive concern. All systems that provide this service are not the same! The technical infrastructure and security can vary dramatically!

To understand the difference, you must examine the architecture and technical platform being used by your provider. Have they made the necessary financial investment to insure your data security, or do they create a sense of virtual security by simply talking about it? Ask the necessary questions to insure your information is being protected?

To educate yourself you will need to understand the difference between a secure network and an open network. A secure network is a protected layer between the originating point of entry and the destination of that information. It is similar to insulation that helps prevent a draft. Without proper insulation, your information can leak or be susceptible to data interception exposing your vulnerable information.

This can be avoided by adding a layer to the network called a secure socket layer (SSL). This layer is an added precaution to secure the information when you enter it and also when it travels. Upon the point of entry this layer creates a shield from outsiders (hackers) and makes it more difficult for them to read and run with the information. Subsequently, after you hit "enter or send" it encrypts the information in an unreadable fashion until it reaches its final destination. If the network does not have this added insulation your information is traveling over an open pipe (no insulation) and is very susceptible to anyone looking to take it.

If your information happens to travel safely to it's destination…than what? Where is this information stored? Is it shared or sold to other networks, such as direct mail houses, or other businesses wishing to obtain it? Is this information moved again for the convenience of the company you're dealing with? How does it get to the bank for processing? How does it get back? Again, is the data secure?

To examine the security of information storage we must understand the difference between open storage and locked-down storage. When your information arrives at its destination it usually resides on a computer for quick future reference. Is this computer or server sitting in an office in an open environment, available to anyone? If the information traveled into an open environment it can also be seen or "hacked" through the same unprotected network. If the information is moved again to another server it is again open to the same vulnerability.

A locked-down environment creates a secure firewall that protects the information once it arrives and provides several layers of security to keep out the "unwanted". This is commonly known as a Certified Data Center. These types of hi-tech facilities were created to house and protect information and equipment from "outsiders". They also provide layers of redundancy, failover, and automated data backup and off-site storage. They are monitored 24/7 to insure reliability and security.

As a final precaution your provider must insure that your financial information is encrypted within the database (software). There are only a few reliable and secure databases working on today's networks that advertise unbreakable security. Oracle is a national leader in such databases and provides the only standing record for being "unbreakable" along with unmatched speed.

John Chalk, President and CEO of eFit Financial, located in Denver, Colorado, toll free 877-772-3348. His company would be happy to answer any questions regarding web-based software and financial services running over the Internet.