Data breaches harm consumer trust: Study

FireEye provides protection against cyber threats to enterprises and governments. The company’s recent survey finds that high-profile data breaches are negatively impacting consumer trust in major brands.

The survey found that 75 per cent of respondents were likely to stop purchasing from a company if a data breach was found to be linked to the board failing to prioritize cyber security.

The survey findings also highlight the potential long-term financial impact of data breaches on major brands, with 59 per cent of those surveyed warning they would take legal action against companies if a data breach resulted in their personal details being used for criminal purposes. Seventy-two per cent of respondents also reported that they will now share fewer personal details with companies, which could hit the revenues of organizations—from social media platforms to search engines—that rely on collecting detailed consumer data for advertisers.

“Unfortunately, large cyber attacks and data breaches are becoming more commonly associated with brand names in the United States,” says Grady Summers, senior vice-president and chief technology officer, FireEye. “After major data breaches, organizations often attempt to regain customer trust through initiatives such as free monitoring or other compensation. But this research finds that, despite these efforts, the cost of the attacks – both financially and in damaged reputations – remains for long after the breach.

“As the results tell us, consumers are more aware and increasingly willing to protect their data – not only by sharing less personal information, but also by taking their business elsewhere,” Summers continues. “Brands must now realize that data protection is something customers have come to expect and investments in security can create a competitive advantage in today’s world of growing cyber attacks.”

Other key findings included the following:
• 52 per cent of respondents would consider paying more for the same products or services from a provider with better data security;
• 54 per cent of respondents feel more negatively of organizations breached;
• 78 per cent of respondents are cautious of organizations’ abilities to keep data safe;
• 52 per cent of respondents said security is an important or main consideration when buying products and services;
• 90 per cent of respondents expect to be informed within 24 hours if their service provider had suffered a data breach which could have compromised their data.

FireEye commissioned independent technology market research specialist Vanson Bourne to undertake the research upon which this report is based. Two thousand interviews took place during April 2016 with regular consumers aged 18 or older in the United States. Interviews were conducted online using a rigorous multi-level screening process.

Download a copy of the report here.