Financial Data Breach Would Affect Loyalty, Say Consumers

August 6, 2014

This article is included in these additional categories:

Brand Loyalty & Purchase Habits | Privacy & Security | Retail & E-Commerce

SafeNet-Impact-Data-Breaches-Consumer-Loyalty-Aug2014A financial data breach would turn some consumers away from a business for good, finds a survey from SafeNet. Asked how likely they would be to shop or do business again with a company (retail, financial, healthcare, social media) that had experienced a data breach, 1 in 4 US respondents said they would never do so again (6%) or would be very unlikely to do so (18%). Not surprisingly, that sentiment was substantially higher when respondents were asked about a data breach involving financial and sensitive information.

Indeed, one-quarter of US respondents said they would never do business again with a company which had a data breach where sensitive information (such as card details, bank account, social security numbers and passwords) was stolen – and another 27% would be very unlikely to give the company another chance.

By comparison, fewer than one-quarter would be very unlikely to – or never – do business with a company if the data breach only involved non-financial information such as contact information.

Interestingly, in each case, US respondents were more forgiving than the global average (the survey was fielded among consumers in the US, UK, Germany, Australia, and Japan). That’s despite a separate report from SafeNet finding that during the second quarter of this year, the US accounted for 85% of compromised records worldwide and roughly three-quarters of reported incidents.

Overall, 49% of US respondents to the SafeNet survey don’t feel that companies take the protection and security of customer data seriously enough, a figure that was in line with the global average.

The study is the latest in a string of research looking at the impact of data breaches. Some of the highlights of those studies follow:

  • 86% of UK consumers would be “not at all likely” or “not very likely” to do business with an organization that had suffered breaches involving credit or debit card details (Semafone);
  • 51% of retailers using Microsoft’s Cloud Security Readiness Tool do not have a plan for responding to security breaches (Microsoft);
  • Almost one-quarter of American internet users polled have at least temporarily stopped buying online because of security concerns (USA Today); but
  • Only 7% of customers planned to reduce spending at Target after its data breach (Bloomberg);
  • When it comes to companies that have exposed customers to data breaches, consumers are most likely to avoid small online merchants and alternative payment providers (Javelin Strategy & Research).

About the Data: The research from SafeNet polled 4559 adults across 5 countries – US, UK, Germany, Japan, and Australia. The research was carried out between June 27 and July 4, 2014. Respondents consisted of adults who use the Internet.


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