A global survey conducted by data protection solutions provider SafeNet once again confirms that data breaches, especially ones that involve financial data, have a negative impact on customer loyalty.
According to the study, 65% of the roughly 4,500 respondents are unlikely to do business with a company that experienced an incident in which credit card details, bank account numbers or online banking login data was stolen. Consumers in the United States and Germany appear to be the least concerned, with 54%, respectively 53%, saying that they would not do business with a firm that suffered a data breach. Japan is at the other end of the poll with 82%.
Data breaches that involve only personally identifiable information can also affect customer loyalty, with 57% of respondents saying that they would most likely stop using the services of an organization that suffered such a breach.
“Data breaches are not just breaches of security. They’re also breaches of trust between companies and their customers, and can result in not only negative publicity but lost business, lawsuits, and fines that can threaten the viability of the business,” said Tsion Gonen, chief strategy officer at SafeNet. “For organizations that fail to address their security vulnerabilities, the problem is only going to get worse as stricter regulations governing the reporting of data breaches are introduced across the world, making breaches more visible to the public. So companies need to do all that they can to keep customer data protected.”
The Q2 Breach Level Index published by SafeNet on Wednesday shows that a total of 175 million records were exposed worldwide in the second quarter as a result of the 237 data breaches that occurred during this period.
When asked about the efforts made by companies to protect customer data, only half of the respondents said they feel that companies take data security seriously. SafeNet believes that the responses of many people to this question are influenced by the large number of breaches that occurred over the past period.
“With the increasing frequency and size of data breaches, it’s clear that being breached is inevitable and perhaps only a matter of time. Cyber criminals are going after easier targets, and that is frequently personal data that is often unencrypted,” Gonen said. “With the implications clear, it’s time for companies to start thinking about protecting more of that data with strong encryption and multi-factor authentication. Only those organizations that adopt a ‘secure breach’ approach and ensure that all customer data remains encrypted will find themselves able to retain their customers should a data breach occur.”