Data breach victims likely to lose customers

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Data breach victims likely to lose customers

Microscope contributor

Varonis Systems says a recent report highlights the fact that people are less likely to deal with an organisation where their data has been lost due to a breach, writes Linda Endersby.

The report from the Ponemon institute says that 72% of buyers who have been notified of a data breach at a company they had dealt were dissatisfied with the communication.

As officials with Experian - who commissioned the survey - state, it is important for companies to do everything possible to safeguard consumer data, it's just as important to communicate effectively in the event of a breach.

Varonis welcomed news in the report that 25% of respondents said they were notified by letter of a data breach - up from 12% seven years ago, but said this was probably due to increasing compliance demands.

"This really is an unsatisfactory state of affairs," said David Gibson, Varonis' VP of strategy, "If a company I had shopped with had suffered a data breach and lost my data, I'd really want to know what had happened - and what the firm was doing to protect my interests. Many of the 72% of consumers who had been informed - but were dissatisfied - are almost certain to be shopping elsewhere in future"

"As well as telling us that consumers are being more informed about the need for data protection - and will vote with their feet if the company fails to meet its clear obligations in keeping customers informed - I would argue that firms need to do all in their power to prevent a breach from taking place in the first place, or lose their customers as a result," added Gibson.

Gibson explained that all organizations should regularly review the way they protect their customer data, especially as the amounts of unstructured data (80% in most organizations) continue to grow.

"This report - which serves to highlight the potential loss of customers that a data breach will result in - will hopefully act as a wake-up call to any company which has customer data," concluded Gibson. "A data loss and regulatory fine is bad enough, but potentially losing a sizeable number of your existing customers as well shows that failing to protect customer data is a disaster just waiting to happen."


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