Data breaches 'have destroyed customers' trust in companies'

 

In the aftermath of TalkTalk and Ashley Madison hacks, people are less likely to give firms their data

High profile data breaches have decimated consumers' trust in companies, according to a survey by security firm FireEye.


Almost three-quarters of 1,000 UK respondents told FireEye they would not use services from organisations who lost their data in cyber attacks, and nearly two-thirds of people now trust companies a lot less after the torrent of high profile hacks that hit businesses last year.

A whopping 62 per cent of consumers said they will give companies less personal information as a result of a torrent of hacks on firms, FireEye's Beyond The Bottom Line: The Real Cost of Data Breaches report found.

FireEye’s President of EMEA, Richard Turner, told IT Pro: "It’s rare that a day goes past without news of a company being hacked. Consumers are learning more about the direct impact that these breaches can have on them when their data is out.

"Some of the breaches have been very visible in the media [and] the negative perception can be a consequence of customers finding out about breaches before the organisation informs them.”

Dozens of high profile cyber attacks occurred in 2015, including a hit on British broadband giant TalkTalk, which confirmed hackers accessed its systems and stole personal information on thousands of customers last October, resulting in some receiving follow-up phone calls from scammers.

The firm today recorded a £40 million financial hit, and lost 101,000 customers, as a result of the hack.
Online dating site Ashley Madison was another victim to a large scale breach. In July, the firm fell victim to hackers, who stole 37 million users' details from the dating website and posted them online for everyone to see.

The company, which provides a service for people looking to cheat on their partners, has since taken new steps to prevent users of the site from being identified. "We respect your need for discretion," the site says, "so we've added some tools to keep your identity a secret".

But 38 per cent of the 5,500 respondents to FireEye's study said that they now have a negative perception of companies that suffered data breaches last year, while 27 per cent said that the breaches made them view all organisations that they buy from more negatively.

UK high street firms Carphone Warehouse and T-Mobile were also hacked during 2015, while two-thirds of large businesses have experienced a cybersecurity breach in the last 12 months, according to a government survey released this week.

And it doesn't look like they will stop any time soon. Turner said that by looking at the current landscape, it is likely that these types of attacks will become more frequent.

"Breaches are inevitable - if the bad guys think there’s something worth stealing, they’re going to continue trying to steal it," he added. "We’re seeing more disclosure going on, and more awareness, but it is important for the risk to remain top of mind in the boardroom. Businesses need to ensure that they prepare, react, and respond appropriately in order to reduce the impact to themselves and to their stakeholders."

FireEye’s latest research into the opinions of UK consumers suggests that businesses may be underestimating the damage to their reputation that being a victim to a cyber security incident can cause, with almost half of consumers considering paying more to a service provider that had better data security.