A new study has recently been published showing the impact of security breaches on brand image, and how the behavior of consumers changes when companies experience data breaches that expose private data.
Cyberattacks are now taking place with such frequency that data breaches are now to be expected. It is no longer a case of whether a security breach will occur, it is now just a case of when it will happen. Even with the best protections in place to protect sensitive data, breaches will still occur.
Many consumers are aware that the current threat levels are greater than ever and that cyberattacks will occur. However, how do consumers react to breaches of their personal information? Do they forgive and forget or are they taking their business elsewhere?
What is the Impact of Security Breaches on Brand Image?
The FireEye study set out to examine the impact of security breaches on brand image. 2,000 interviews were conducted on consumers in the United States to find out whether security incidents changed behavior and whether data breaches altered perceptions of companies and trust in brands.
The results of the survey clearly show that the failure to invest in robust cybersecurity defenses can have a major impact on revenue. 76% of surveyed consumers claimed they would take their business elsewhere if they believed a company’s data handling practices were poor or that the company was negligent with regard to data security.
75% of respondents said they would likely stop making purchases from a company if they felt that a security incident resulted from a failure of the company to prioritize cybersecurity.
Loss of business is not the only problem companies will face following a data breach. If a breach of personal information occurs and data are used by criminals for identity theft or fraud, 59% of consumers would take legal action to recover losses.
Even when companies take action to mitigate the risk of losses being suffered by consumers – such as providing identity theft protection services – brand image remains tarnished. Reputation damage after a data breach is suffered regardless of the actions taken by companies to mitigate risk. It can also take a considerable amount of time to regain consumers’ trust. More than half of respondents (54%) said that their impression of companies was negatively impacted after a security breach occurred.
Fast action following a data breach can help to restore confidence, but this is expected by consumers. The survey showed that 90% of consumers expect to be notified of a breach of data within 24 hours of an attack taking place, yet this is something that rarely happens. All too often consumers are made to wait weeks before they are informed of a breach of their personal information.
The study also shows that as a result of large-scale breaches consumers are now much less trusting of companies’ ability to keep data secure. They are also much more cautious about providing personal information. 72% of consumers said they now share less information with companies due to the volume of data breaches now being suffered.
The take home message from the survey is organizations must do more to protect consumer data and to prevent data breaches from occurring. If companies invest heavily in cybersecurity and can demonstrate to consumers that they take privacy and security seriously, the negative impact of security breaches on brand image is likely to be reduced.