High-profile data breaches are negatively impacting consumer trust in major brands, according to a new report. 76 percent of respondents would likely take their business elsewhere due to negligent data handling practices. Additionally, 75 percent of consumers stated they were likely to stop purchasing from a company if a data breach was found to be linked to the board failing to prioritize cyber security.
The survey findings also highlight the potential long-term financial impact of data breaches on major brands, with 59 percent of consumers warning they would take legal action against companies if a data breach resulted in their personal details being used for criminal purposes.
72 percent of consumers also reported that they will now share fewer personal details with companies, which could hit the revenues of organizations—from social media platforms to search engines—that rely on collecting detailed consumer data for advertisers.
“Unfortunately, large cyber attacks and data breaches are becoming more commonly associated with brand names in the United States, after major data breaches, organizations often attempt to regain customer trust through initiatives such as free monitoring or other compensation. But this research finds that, despite these efforts, the cost of the attacks—both financially and in damaged reputations—remain for long after the breach.
“As the results tell us, consumers are more aware and increasingly willing to protect their data—not only by sharing less personal information, but also by taking their business elsewhere,” Summers continues. “Brands must now realize that data protection is something customers have come to expect and investments in security can create a competitive advantage in today’s world of growing cyber attacks.”
Consumers are less trusting of brands and will share much less with them once they have experienced a large breach:
- 54 percent of consumers think more negatively of organizations that have experienced a cyber security breach
- 78 percent of respondents are cautious of these organizations’ ability to keep their data safe
- 72 percent of consumers have decided that in light of recent public attacks, they now share far fewer personal details with companies.
Data breaches have tangible legal and financial impacts on brands they currently use:
- 59 percent of consumers would take legal action against companies if a data breach resulted in their personal details being stolen or used for criminal purposes
- 75 percent of consumers confirmed that they would stop purchasing from a company if a data breach was found to be linked to a lack of board level attention to cyber security
- And, back to the stat of 72 percent sharing less personal data, this is key to many revenue streams for organizations—from social media platforms to search engines—that rely on collecting detailed consumer data for advertisers.
Consumers expect information and a response from businesses far faster than they experience today.
- 90 percent of respondents would expect to be informed within 24 hours if their service provider had suffered a data breach which could have compromised their data.
Once an attack on a big brand occurs, there is nothing good that comes of it.
- Consumers make security part of the purchasing decision so it needs to be addressed regardless of whether you have suffered a breach or not
- 52 percent of consumers said security is an important or main consideration when buying products and services. So the better organizations are at keeping their security measures and practices transparent, the better standing they will remain with the general public even when breaches occur.
To talk with someone who knows how to increase consumer trust by bolstering your information security, contact Ezentria today.