Consumers trust financial institutions more than other organizations to keep their private data secure, new research shows.
The global study, “Privacy Uncovered: Can private life exist in the digital age?” explores consumer attitudes towards company stewardship of personal data and the damage that data breaches can cause to the business of the companies affected.
The report was written by the Economist Intelligence Unit, a unit of the Economist Group.
Sponsored by Beazley Plc, the research reflects the views of more than 750 consumers worldwide and includes commentary from regulators and business leaders on the study’s findings.
By a large margin, the consumers polled perceive the most secure organizations to be banks and other financial institutions. More than 41 percent of respondents perceive them as “very secure,” 49.8 percent as “moderately secure,” and only 6.6 percent as “not secure at all,” the report states.
“We keep on hearing how banks in the U.S. and Europe have lost consumers’ trust,” said Paul Bantick, who heads Beazley’s Technology, Media and Business Services team in London. ”In some respects that may be the case, but when it comes to stewardship of private customer data, the research suggests they still enjoy a far higher level of trust than other organizations.”
More than 32 percent of respondents in the study say they “strongly agree” with the statement that, in the event of a data breach, they would cease to do business with the organization concerned. When they were asked whether they had personally suffered a data breach in the past two years, 23 percent of respondents said they had.
Describing how they had reacted to a breach, 38 percent said they no longer did business with the organization in question “because of the data breach.”
“Consumers clearly feel very strongly about the perceived betrayal of trust that a data breach represents,” Bantick said. “The ripple effects can be very wide: The EIU research also found that 46 percent of respondents who had suffered a data breach had advised friends and family to be careful of sharing data with the organization.
“There appears to be a strong willingness not just to cease doing business with a company that loses your data, but to tell your family and friends about it,” Bantick adds. So there’s a clear multiplier effect in terms of the reputational damage that can be inflicted.”
The study also reveals widespread unease about the stringency of regulation concerning the misuse of customer data. More than 70 percent of respondents in Europe and the U.S. say that regulation was not strong enough, as did 69 percent of respondents in Asia.
Nearly 70 percent of respondents, the report adds, view incentives for businesses to protect personal data as inadequate. The study found little variation in this sentiment among European, American and Asian respondents.
The EIU report suggests that perceptions of data security at various organizations vary widely. For example, only 10.6 percent of respondents thought their data “very secure” with online retailers, versus 17.2 percent with health care providers such as doctors and hospitals, and 17.6 percent with the government or government agencies.