Businesses risk permanent loss of consumer trust over security breaches
Written by staff reporter
Research conducted on behalf of payment security firm PCI Pal has found that 41% of UK consumers will never return to a brand or a business following a security breach, representing a significant loss of revenue. In addition, 44% will stop spending with a business or brand for several months in the immediate aftermath of a security breach.
The findings suggest that the combination of high-profile recent breaches, headlines devoted to new data privacy regulations such as the GDPR, and personal experience have put security concerns at the forefront for UK consumers. Over a third (38%) say they have personally suffered the negative consequences of a data security breach.
Meanwhile, consumers reported that even being perceived as having insecure data practices can be enough to influence their spending decisions: 31% said that they spend less with brands they perceive to have insecure data practices, while 26% say they stop spending completely if they do not trust a company with their data.
James Barham, CEO at PCI Pal, said: “While security breaches are not new, consumers’ attitudes towards them appear to be changing significantly, with the vast majority of those surveyed now reporting that trust in security practices, or lack thereof, influences not just where but also how, and how much they are prepared to spend.”
The findings suggest that it is not just online threats that worry consumers – with more than three-quarters uncomfortable with providing payment information, such as credit card details, over the phone. Specifically, almost a third said they would hang up and find an alternative payment option, while 24% would ask for an online payment option. When looking at the research findings by age group, 41% of those aged 18-24 said they would give their payment information over the phone with no questions asked, compared to just 14% of those aged 55-65.
Barham added: “What’s really interesting is how consumers are increasingly questioning data security practices. Nearly half of those surveyed know they should check a company’s security processes and 22% said they question businesses directly or research how an organisation safeguards consumer data. This suggests a real change in how consumers prioritise privacy and security. This should act as a real wake-up call to consumer-facing brands: they need to adopt stronger security practices, especially for those operating contact centres where payments are handled over the phone if they want to keep customers loyal and spending with them.”