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How Security Breaches Affect Customer Trust

Tue, 05/17/2016 - 10:22 -- Kayla Smith

Consumers understand that they are the ultimate victims of security breaches. Although it was a company or organization that was hacked, consumers often pay the final price. It is usually their private information that falls into the hands of hackers. Whether it’s payment information, social security numbers, addresses, or medical data, consumers are fully aware of the devastating effects of a company’s data breach.

This is why 76 percent of consumers would take their business elsewhere if they found that a company mishandled their private data, according to a new report by FireEye security firm. Also, 75 percent of survey respondents said that they would stop purchasing from a company whose data was breached due to failure to prioritize cybersecurity.

"Unfortunately, large cyber attacks and data breaches are becoming more commonly associated with brand names in the United States," stated Grady Summers, Senior Vice President and Chief Technology Officer at FireEye. "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.”

Some key findings from the survey include:

  • 52% of consumers would actually pay more in order to buy from a company that had strong cybersecurity.
  • 54% of consumers think less of companies that have suffered a data breach.
  • 72% of consumers now purposefully share less with companies because of recent high profile data breaches.
  • 59% of consumers would take legal action against a company that failed to protect their private data.
  • 90% of consumers believe they should be notified within 24 hours of the discovery of a data breach that could have affected their private data.

The researchers asked the question, “Which of the following would be of most concern to you if they were the victim of a data breach, potentially exposing your details to cyber-criminals?” The following chart shows the results:

"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 said. "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."

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