Consumers no longer trust firms that misuse customer data or suffer data breaches

Consumers no longer trust firms that misuse customer data or suffer data breaches

Orbitz data breach: Hackers stole personal & financial details of 880,000 customers

More and more consumers are now supplying false personal information to companies so as to protect themselves in the event of data breach or companies misusing or selling their information.

Over half of all people are no longer comfortable with sharing their personal information with companies they know to have been selling or misusing data without consent.

These latest indications, revealing how consumers have started to value their personal information and privacy while handing over such data to companies, were revealed by a survey of over 7,500 adult consumers across the UK, the US, France, Germany, and Italy conducted by security firm RSA.

In the past few years, a large number of enterprises have, because of poor data security practices or because of human error, have suffered large-scale data breaches, thereby compromising personal details and financial information of millions of customers both in the UK and in the rest of Europe. With hackers succeeding in breaching their IT networks with increasing regularity, consumers are now more concerned about the security of their personal and financial information than ever before.

According to the RSA survey, 55 percent of consumers avoid handing personal data to a company they know to have been selling or misusing data without consent, and over 41 percent of them deliberately falsify data they supply to companies so as to protect themselves in the event of a data breach or companies misusing or selling their information.

As many as 78 percent, or four out of every five consumers, also said that their buying decisions are influenced by how certain companies handle consumer data. What this means is that if a firm suffers a massive data breach, it will lose the trust of a large number of consumers who would not be comfortable with dealing with the firm anymore, thereby destroying the firm’s business prospects.

‘As milestone regulation, such as GDPR, comes into effect this year, data security and privacy are hot on the agenda for consumers and companies alike. Consumers are keenly aware of recent high profile breaches, and are therefore demanding much more from the companies that handle their data,’ said Rashmi Knowles, Field CTO, EMEA at RSA Security.

‘The business impact of not ensuring appropriate levels of security will reach far beyond fines for compromising customer data. With more than half (54%) of respondents less likely to buy from a company they know has been mishandling data, and 62% inclined to blame the company above anyone else if data is lost, it’s clear consumers are ready to vote with their feet against organisations that fall short of their expectations. The financial and reputational damage of a data breach in 2018 could be devastating,’ she added.

Enterprises that do not enjoy positive reputation in terms of data handling are also being supplied falsified personal information by consumers who do not feel comfortable sharing their real details. According to the RSA survey, such falsified information includes phone numbers, date of births, email addresses, home addresses and names.

However, consumers aren’t as protective about their personal information when it comes to sharing such data with companies that have demonstrated the ability to secure customer data.

‘Consumers clearly understand the value of their personal data and – while there may rightly be occasions for caution – they are willing to part with it under the right circumstances. Almost a third (31%) of respondents believe companies that have more of their customers’ data are able to offer better and more personalised products, and over a quarter (26%) would gladly trade their data for an improved customer experience or service,’ Knowles added.

ALSO READ: Consumers want firms to do more to prevent breaches

Copyright Lyonsdown Limited 2021

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