Customers frequently disclose personal information in order to engage with online retail, banking and social media platforms. However, a recent report by Gemalto (the “Report”) reveals that customer expectations regarding responsibility for personal data security place a greater burden on the organizations holding that data than might be expected.
According to the Report, customers place 70% of the responsibility for the protection and security of customer data on companies, and only 30% on themselves. At the same time, fewer than 30% of customers believe organizations are taking data security seriously, and more than 50% are “fearful” of their personal data being stolen in the future.
The Report reveals that since 2013, approximately 4.8 billion data records have been exposed due to cybersecurity breaches. A staggering 64% of those breaches were attributable to identity theft, the most prevalent type of breach. Regardless of the risks (which most are well aware of) customers still actively use online retail, banking and social media sites, and customers willingly provide personal data in the process.
Customers are reluctant to change their behaviour, despite becoming increasingly aware of the threats posed to them online. In balancing convenience and security, customers ultimately trust that companies will keep their personal data safe, regardless of whether that trust is well-founded. At the same time, customers place relatively little responsibility on themselves. More than half of the customers surveyed by Gemalto admitted to using the same password across multiple online accounts. Businesses must therefore be prepared to respond to customer expectations by inspiring confidence in their cybersecurity strategies.
What’s at Risk?
For customers, the negative consequences of a data breach can be severe. Identity theft and other cybercrimes can do serious damage to a person’s financial and personal wellbeing. Gemalto found that a majority of customers surveyed had been affected by a breach and experienced the fraudulent use of their financial information and personal details. More than a quarter of customers affected attributed the breach to a failure of the company’s data security strategies.
For businesses, the negative consequences of a data breach can also be severe and costly on a significant scale. After discovering evidence of a cyberattack, businesses are often forced to disclose the extent of the breach and take remedial steps to repair any damage done. This process is painfully public, and the resulting negative publicity can lead to a significant loss in customer confidence, customers and profits.
According to the Report, businesses should be prepared to lose significant business following a cyberattack or data breach. The following sets out the percentage of customers who responded that they would stop using a business altogether if a data breach were to occur:
- Retail – 60% of customers said they would stop shopping online
- Banking – 58% of customers said they would stop banking online
- Social media – 56% of customers said they would stop using social media
Overall, 66% of customers surveyed said they were unlikely to use a business that experienced any sort of breach involving theft of financial or other sensitive information.
Meeting Customer Expectations
With nearly six in ten customers convinced they will fall victim to a breach in their lifetime, organizations need to be prepared to meet customer expectations and inspire confidence in their ability to protect customer information. According to the Report, lack of customer confidence is directly tied to a lack of strong cybersecurity measures.
As we recently outlined in an article on TheSpotlight.ca, there are a number of strategies that organizations can implement in order to prevent data breaches. These strategies include defining cybersecurity success, pressure-testing security capabilities and investing to innovate and outmaneuver adversaries. The Report also suggests the use of solutions such as two-factor authentication and data encryption, both of which are currently underused across banking, retail and social media spaces.