Hacked Companies Could See Customer Exodus
Study reveals 48% of people will close accounts following a data breach
Research by cybersecurity company Positive Technologies has uncovered the depth of impact on customer loyalty in the aftermath of a hacking incident. Almost half of the 1,000 people questioned by OnePoll (48%) claimed they’d cancel accounts if a provider of theirs suffered a data breach. In addition, 35% said they would actively avoid choosing a company that had been hacked in the future if they were switching providers.
Speaking about the findings, Alex Matthews, EMEA Technical Manager at Positive Technologies explained, “As people wake up to the sensitivity of the data stored about them by the companies which provide their mobile phones, banking, healthcare, leisure and more, they become even more protective.
“These organizations are responsible for collecting and protecting massive amounts of data, yet the last twelve months have proven they can fall prey to hackers. TalkTalk, Yahoo, Three, and even Tesco Bank are all respectable brands that have been compromised in some way, with customers left feeling violated. In the end, they vote with their feet and walk away. It takes a lot of time and money to acquire new customers, but only seconds to lose them.”
The study also found that 45% of respondents said they would claim for damages if their personal details were stolen, with a further 24% saying they would join with others to bring a class action. This is a reality Yahoo is already facing as, just one day after it confirmed it had suffered a data breach, Ronald Schwartz launched a lawsuit against the company on behalf of all its U.S. customers. When fraudulent transactions are made, these too have a financial impact, as Tesco Bank can testify by having to cover the £2.5m stolen from 9,000 customer accounts.
Matthews concludes, “The security industry has been warning that it’s not a case of if a company will be breached, but when. The issue is, hackers just need to get lucky once while defenders need to win every time. Organizations must lock data down tight if they don’t want customers to walk.”
The survey, completed at the end of October, asked 1,000 full- and part-time employed people (53% female / 47% male) living in the UK how they would react if a company they dealt with were breached. Positive Technologies (www.ptsecurity.com) provides technology that allows large organizations to protect against vulnerabilities, which are often the start of advanced hacks.