New research from data solutions provider, SafeNet, has shown that 65% of consumers are unlikely to do business again with companies that have suffered a financial data breach, in which logins, bank account details or passwords were stolen.
According to SafeNet, the survey, which polled 4 500 adults who use the Internet, across the US, UK, Germany, Japan and Australia, and was carried out between 27 June and 4 July this year, highlights the impact that breaches can have on customer loyalty and therefore the bottom line.
Breaches in which personal identifiable information was stolen, were found to be slightly less harmful than those involving financial data, with 57% of those surveyed saying they were unlikely to do business with an organisation who had suffered this sort of breach.
Tsion Gonen, chief strategy officer, SafeNet, says breaches are more than just breaches of security; they are breaches of trust between a business and its customers.
"Breaches can result in not only negative publicity but lost business, lawsuits and fines that can threaten the viability of the business. For organisations that fail to address their security vulnerabilities, the problem is only going to get worse as stricter regulations governing the reporting of data breaches are introduced across the world, making breaches more visible to the public. So companies need to do all that they can to keep customer data protected," he adds.
The research also brought to light that only half of consumers believe that organisations are taking data security seriously, a fact that could be due to the large number of breaches that have happened already this year, that were revealed by the SafeNet Q2 Breach Level Index findings, to number 237 between April and June 2014.
"During the second quarter of 2014 alone, data breaches have hit many well-known companies, including AOL, Dominos, eBay, Office and Spotify, with more than 175 million customer records of personal and financial information compromised worldwide."
Gonen says the growing size and frequency of breaches makes it clear that being breached is a matter of 'when' and not 'if'. He says cyber crooks are going after easier targets, and unencrypted personal data. "It is time for companies to start thinking about protecting more of that data with strong encryption and multi-factor authentication. Only those organisations that adopt a 'secure breach' approach and ensure that all customer data remains encrypted will find themselves able to retain their customers should a data breach occur."
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