Recovering from a breach can be expensive, just ask Sony or any other company that has fallen victim to a cyber attack recently. Not only are the costs stemming from investigations, breach notifications and fines expensive for organizations, the damage done to a brand and loss of customer confidence can be incredibly costly.
Recent findings from a survey of eCommerce merchants released today by CyberSource and Trustwave, revealed that nearly 70 percent of respondents cited the need to “protect the brand” as the primary driver for tightening controls against hackers and other payment security risks. Only 26 percent said avoiding fines resulting from non-compliance with the Payment Card Industry Data Security Standard (PCI DSS) were the key motivator. In other words, the lifetime value of customers is far more important than a one-time fine due to non-compliance.
“A breach has serious consequences for nearly every division of an eCommerce merchant’s organization,” said Dayna Ford, Senior Director, Product Management at CyberSource. “But by far the most damaging impact is to the company’s brand, affecting revenue, customer loyalty, and even stock valuation. Knowledge of this phenomenon is now widespread, so we’re not surprised at the survey finding that puts brand integrity as the most important rationale for payment security investment.”
“In the face of increasing numbers of security breaches and data theft, there’s a real urgency for organizations to deploy powerful and effective security strategies,” said James Paul, Senior Vice President of Global Compliance Services at Trustwave. “Studies like ‘The Payment Security Practices and Trends Report,’ published today, should help organizations learn best practices and likely costs to attain appropriate levels of security.”
Key survey discoveries:
• Data moving out: Over the next 24 months, an increasing proportion of organizations expect to remove payment data from their environment as a way of reducing security risks.
• Efficiency improving: Organizations that do not capture, transmit, or store data inside their own network tend to employ fewer personnel, validate PCI DSS compliance more quickly, and operate at a lower overall cost of payment security management.
• “Data out” merchants spend less on infrastructure: 75 percent of PCI DSS Level 1 merchants that have removed payment data from their environments spend less than $500,000 on their payment security infrastructure. Only 60 percent of those that keep data in-house can make that claim.
• Risk not confined to outsiders: In one counter-intuitive finding, respondents said they felt the threat of payment data theft from inside employees was about equal to the threat from external hackers.
The payment security survey was conducted via an online questionnaire by an independent survey organization from December 6, 2010 through January 31, 2011. Respondents to the survey were required to have personal involvement in the management of their organization’s payment security practices.
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