Data breaches lead to third of customers leaving

Security

by CBR Staff Writer| 02 May 2014

Insecurity leads to a third of costumers leaving, plus legal and compliance costs.

A third of customers prefer to avoid companies that have suffered data breaches, according to a study by Javelin Strategy & Research.

Commissioned by security firm Identity Finder, the report revealed about 33% will shop elsewhere if a company suffers a breach, 30% will change healthcare provide and a quarter will switch their bank.

Al Pascua, senior analyst of Security, Risk and Fraud at Javelin, said: "That's real money lost in customer churn and reduced sales, and certainly demonstrates how the reputation of the organisation hits the bottom line.

"It's noteworthy that about a third of people will go as far as to find a new doctor, if their provider is breached, as we all know healthcare services can be a big hassle to change."

Data breach not only hits revenue it adds up the expenses including cost related to compliance, legal, and victim reparation costs.

Following data breach at US retailer Target, the company reported loss of revenue and a drop in stock prices. It spent $61m on investigations, credit-monitoring services, extra call centre staff and legal services, the report added.

Identity Finder chief executive Todd Feinman said businesses are experiencing pressure to protect sensitive data not only from industry and government regulators, but also customers and shareholders.

"Consumer behavior indicates that data breaches impact both expenses and revenue," Feinman said. "Organisations must be more proactive in preventing a breach by understanding where a data leak can originate.

"By discovering and managing sensitive information at its source and not at the perimeter or after the fact, businesses can identify risk, change employee behavior, and justify where to spend security dollars."

Identity Finder suggests companies secure unprotected files, remove at-risk data, monitor policies and behaviour centrally, and comply with regulations.

Comments
Post a comment

Comments may be moderated for spam, obscenities or defamation.

Join our network

756 people like this.
0 people follow this.

Security Intelligence

Buy the latest industry research online today!
See more

Suppliers Directory


See more
Privcy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.