Reputational damage directly affects sales

Posted On 11 Mar 2014
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New research commissioned by Semafone has revealed that the overwhelming majority of people would not do business with a company that had failed to protect its customers’ personal data. In the survey, conducted by OnePoll, 86.55 per cent of 2,000 respondents stated that they were ‘not at all likely’ or ‘not very likely’ to do business with an organisation that had suffered a data breach involving credit or debit card details. The proportion of women expressing this view was 91.48 per cent, which was markedly higher than the figure of 81.93 per cent for men. The survey also revealed that other types of data breach would drastically erode customer confidence. Breaches involving credit or debit card data breach were the most worrying for people, followed by home address, telephone number and email address. More than 75 per cent of respondents will avoid doing business with companies that jeopardise their personal data. Tim Critchley, CEO of Semafone, says,” These figures underline what we should already know” that the reputational damage suffered by companies who fail to protect personal data can translate directly into a loss of business. The protection of card details is no longer simply a matter of best practice, the economic consequences of a failure to do so are potentially devastating for a business of any size.” The research findings coincide with news that the European Parliament has voted to approve the EU’s new data protection legislation, which brings in a number of serious measures in favour of customers. These include a potential fine of five per cent of gross revenues for companies who fail to protect customer data adequately, and the requirement to inform local data protection authorities within 24 hours of any breach. ” I can’t see how any organisation can continue to ignore the increasingly loud demand from customers to keep personal data safe,” adds Critchley.” Our research shows how seriously the public takes the safeguarding of its data, and the new data protection legislation makes effective security even more imperative. Not only will offending companies face the financial penalty of a fine, but they will suffer the immediate negative publicity that comes from the 24-hour disclosure rule. I think we are going to see a great many companies starting to take security a whole lot more seriously.”

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.