Global Survey by Gemalto Reveals Impact of Data Breaches on Customer Loyalty

Nearly two-thirds (64%) of consumers surveyed worldwide say they are unlikely to shop or do business again with a company that had experienced a breach where financial information was stolen, and almost half (49%) had the same opinion when it came to data breaches where personal information was stolen.

This is according to a recent global survey by Gemalto, titled “Broken Trust: ‘Tis the Season to Be Wary,” which surveyed 5,750 consumers in Australia, Brazil, France, Germany, Japan, UK and US.

Six in 10 people surveyed (59%) believe that threats to their personal information increases during the festive season, and two in 10 (18%) believe that they are likely to be a victim of a breach during the holiday season.

Only a quarter (25%) of all respondents feel that companies take the protection and security of customer data very seriously. More than twice as many respondents feel that the responsibility of protecting and securing customer data falls on the company (69%) versus the customer (31%).

The survey revealed that 31% of respondents have already been affected by data breach in the past. Around four in 10 state the most likely causes for being a victim of a breach are visiting a fraudulent website (42%), phishing attacks (40%) or clicking a fraudulent web link (37%). The emotional impact of data breaches has also created apprehensive feelings towards businesses with nearly one-fifth surveyed (19%) feeling they are likely to be a victim of one within 12 months to three years.

Around a quarter (23%) of respondents who have been a victim of a data breach, either have, or would, consider taking legal action against the breached company involved in exposing their personal information. Almost half (49%) of respondents said they would take or would consider taking legal action against any of the parties involved in exposing their personal information.

However, the consumer is not completely absolved of responsibility. Despite the many risks involved, the survey also found that a majority (54%) of respondents are using the same password for all or some of their online accounts. Of the respondents who actively use social media accounts, only a quarter (25%) use two-factor authentication to secure all of their social media accounts. Of the respondents who actively use online/mobile banking, around three-fifths (58%) say that all of their banks use two-factor authentication to secure their internet banking.

This isn’t as widespread amongst retailers, however. Of the respondents who actively use online retail accounts, one in four (25%) state that all of the online retail apps/websites they use, require two-factor authentication to secure online transactions.

“The media coverage of massive data breaches has done little to instil consumers’ confidence in how well companies, big and small, are protecting their data,” said Jason Hart, VP and CTO for data protection at Gemalto. “The fact that employees don’t even feel that their employers are taking the protection of their personal data security very seriously rings alarm bells. Either companies need to increase their security measures or, assuming that they already have these in place, they need to communicate this to their customers.”