Merchant Innovation

Been Breached? Say Bye-Bye To Customer Loyalty

The data breach has become a fact of modern retail, but while most brand managers are aware that actions have consequences, the new reality of data theft means that a breach can sometimes have two or three aftershock effects years down the line.

Those are the findings of a new report from enterprise data security firm Vormetric. In a survey of customer attitudes on the effects of data breaches on their shopping habits, 85 percent of American consumers admitted that if “significant personal consequences” present themselves after their information is compromised as part of a breach, they would have no problem seeking a new place to spend their money.

In particular, 67 percent said that they would cut ties with the victimized brand if money was actually removed from their checking accounts, 62 percent said so if their credit cards were charged for fraudulent purchases, 57 percent said the same if their personal information was released and 54 percent would look elsewhere if their credit scores were affected.

“It’s been two years since major retail attacks made ‘data breach’ a household word,” Tina Stewart, vice president of marketing at Vormetric, said in a statement. “The revelation of a major data breach following the Black Friday weekend in 2013 was the starting point for two record years of data breaches that have followed. Events since then have demonstrated just how much financial and reputational havoc a data breach incident can wreak on beloved brands.”

As it becomes easier for customers to switch their preferred brands at the tap of a finger, the setbacks data breaches can cause to consumer confidence can be too devastating for some smaller merchants to come back from. However, Sol Cates, CSO at Vormetric, emphasized the need for cheap but efficient encryption strategies to protect data coming and going from internal and external servers.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The May 2019 AML/KYC Tracker, provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

TRENDING RIGHT NOW

To Top