Dis-Chem enhances IT security after data breach debacle

Dis-Chem has fortified its IT infrastructure after a data breach in 2022 that compromised the personal information of over 3-million customers.

This incident led to the Information Regulator issuing an enforcement notice and threatening a R10m fine due to inadequate data protection measures.

In its latest annual report for the financial year ending February 2024, Dis-Chem acknowledged the critical challenge posed by information breaches during the 2023/24 financial year.

The 2022 breach, which was traced to a third-party vendor, forced the company to reassess and strengthen its internal systems, despite being cleared of direct responsibility.

Dis-Chem’s chair, Larry Nestadt, emphasised the company’s commitment to robust cybersecurity practices.

“I am pleased to report that Dis-Chem was cleared of any wrongdoing after a comprehensive investigation, and it was determined that the breach did not originate from within our systems or processes,” he said.

To prevent future breaches, Dis-Chem said it has enhanced its cybersecurity by investing in robust IT infrastructure, conducting regular security audits and continuously training employees on cybersecurity. The company also prioritises staying updated on regulatory requirements and fostering a culture of security awareness and accountability, it said.

Skills shortage 

Dis-Chem identified a skills shortage as one of the big challenges it faces and acknowledged that it competes with other healthcare providers for skilled personnel.

“In the event that Dis-Chem encounters challenges in recruiting skilled personnel as needed or experiences an elevated employee turnover rate, it could potentially result in a significant adverse impact on the group’s business, operational results and financial condition,” the company said.

Dis-Chem said it has adopted strategies such as competitive compensation, career development opportunities and collaboration with educational institutions to attract and retain top talent.

Dis-Chem has joined the chorus of private sector voices expressing concerns about the National Health Insurance (NHI) Act, signed into law by President Cyril Ramaphosa in May. While Dis-Chem supports the goal of universal healthcare, it has called for clarity and transparency in the NHI’s implementation and rollout processes.

The NHI Act raises questions about the role of private healthcare providers and medical schemes in the new system. The act stipulates that once fully implemented, medical schemes cannot cover services provided by NHI, a point of contention among industry players.

Nestadt, in his communication to shareholders, advocated for a collaborative approach between the public and private sectors, leveraging the private sector’s expertise to enhance the NHI’s effectiveness. He urged the government to provide detailed plans and frameworks to ensure a smooth transition to the NHI system.

Industry leaders such as Discovery and Momentum Health have previously voiced concerns about the NHI’s financial viability and the potential limitations on private medical coverage. They argued that restricting private healthcare could overburden the public system and limit access to quality care for those who can afford private insurance.

GobaN@businesslive.co.za