http://www.forbes.com/sites/katevinton/2014/07/01/how-companies-can-rebuild-trust-after-a-security-breach/
By Kate Vinton
Forbes Staff
July 1. 2014
"It's not a question of if you will be hacked, but when," says
cybersecurity expert Joe Adams. This is bad news for companies, not only
because of security risks, but also because data breaches have a
significant and measurable impact on customers’ trust and spending habits,
according to a study released Monday. The good news? Customers, who are
generally not concerned about security until a breach happens, are looking
for transparency and timely responses to breaches, something companies can
provide with enough preparation and foresight.
Interactions, a customer experience marketing group, released a study
Monday called "Retail’s Reality: Shopping Behavior After Security
Breaches." Using the same sampling as the 2010 U.S. Census, the study
looks at how security breaches impact customers' shopping habits.
Forty-four percent of survey respondents had been the victim of a data
breach. A higher 60% of Millennials had had their data stolen, likely
because these 18 to 24-year-olds are much more likely to share their
information online and sign up for retail credit cards, according to
DeMeo, Vice President of Global Marketing and Analytics at Interactions.
Trust for retail is low, with 45% of shoppers saying they don't trust
retailers to keep their information safe. After a security breach, 12% of
loyal shoppers stop shopping at that retailer, and 36% shop at the
retailer less frequently. For those who continue to shop, 79% are more
likely to use cash instead of credit cards. According to DeMeo, shoppers
who use cash statistically spend less money, hurting the company. Indeed,
26% say they will knowingly spend less than before.
All this paints a concerning picture for retailers looking to both keep
their company secure and minimize the negative impact of a security breach
if -- or when -- it occurs. DeMeo says his company does not study the
financial impact of customer reactions to data breaches, but it doesn’t
bode well for a company if consumers are spending and trusting less.
Companies need to either find a foolproof way to prevent security breaches
entirely (an unfortunately idealistic goal), or work to minimize the
negative effect of data breaches on their relationship with customers.
[...]
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