Most people know that data breaches can be costly, but a new report suggests that letting sensitive customer data get into the wrong hands may have longer-lasting effects than previously thought.
According to a recent report [PDF] by international digital security company Gemalto, nearly two-thirds (64%) of customers would be likely to end their relationship with a company if financial or sensitive information was stolen. 94% would take, or would consider taking, legal action against any of the parties involved in exposing their personal information.
To gather data for the report, titled "Data Breaches and Customer Loyalty Report," Gemalto commissioned research firm Vanson Bourne to interview 5,750 customers during Q4 2015. Respondents were from the United States, United Kingdom, Brazil, France, Germany, Japan, and Australia. To qualify for the study, consumers had to actively use online/mobile banking, social media accounts, or online retail accounts.
Unsurprisingly, 69% of consumers feel that the responsibility for protecting customer data lies with the company. However, of the consumers surveyed, only 25% believe that companies take the protection and security of their data seriously and only 38% of employed respondents feel their employer takes the protection and security of their data seriously.
Despite obvious concern about the security of their online data, and a shared feeling that it's the company's responsibility to keep data secure, consumers aren't taking many steps to secure data on their own. 54% of consumers admit that they use the same passwords across their accounts, and 47% of consumers don't use multi-factor authentication when accessing social media accounts. This is true again despite the fact that 55% of those surveyed believe social media sites expose them to the greatest risk.
Realistically, the security of customer data is a shared responsibility; companies should be taking steps to secure data and avoid or mitigate breaches, whilst consumers should practise sound security hygiene and avoid traps like phishing scams. Though it may be a shared responsibility, this survey makes clear that most consumers won't hesitate to place the blame on companies in the event of a data breach.
More worryingly, this report also makes clear that the cost of a data breach can't just be measured in terms of direct aftermath. If the consumers surveyed for Gemalto's research are to be believed, companies that suffer a data breach can expect to lose a noticeable amount of customers, as well.
In short: if you want to keep your customers, you need to keep their data secure. That may seem obvious, but it's something today's companies must be acutely aware of given the magnitude of today's digital threats.
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