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NEW RESEARCH SHOWS DATA BREACHES HAVE A RIPPLE EFFECT ON CONSUMER TRUST

New Research Shows Data Breaches have a ripple effect on consumer trust

By Brad Williamson, Managing Director | July 5, 2019

We live our lives online. Some have embraced it, while others have reluctantly joined the online fray. For all the conveniences, from instant global communication to banking in our pajamas, we rely on a degree of trust that our transactions and information are safe.

This trust is largely implicit. We often depend on mechanisms we can’t see to protect us. There’s no deadbolt to lock. We place our trust in the large companies we interact with to protect us. Until they don’t.

Given the spate of consumer data breaches, Grail Insights recently conducted a survey of 1,069 US consumers to understand how people feel about the state of online privacy, and based on their perceptions, whether they have changed their online behavior. How long is their memory of headline-making security breaches? What did they do as a result? What demographics are the least trusting, and what businesses are most affected?

TECH COMPANIES AREN’T DOING ENOUGH, SO CONSUMERS ARE PROTECTING THEMSELVES

In fact, two-thirds say large companies have too much control over their personal data, while 75% say those companies aren’t doing enough to protect their data and privacy.

When a company is seen as not doing enough, consumers start taking their own security precautions. Due to data security concerns, nearly half of US consumers have changed the way they use online platforms or apps. For example, they may be adding authentication, changing devices, ceasing to shop or bank online, or removing themselves from platforms entirely.

Security-related changes in social media behavior are driven by Millennials. Social media, email, shopping, and financial-transactions are most affected.

YOUR COMPETITORS’ DATA BREACH IS YOUR PROBLEM TOO

We remember what strikes us emotionally: 82% of US consumers remember major data breaches or online data security issues they’ve seen in the news in recent years. The most remembered of those are Equifax, Facebook, and Yahoo.

Thus, it’s not surprising that activities having to do with social media, email, e-commerce, and online financial platforms like banking/investing are also the industries where there are consumer trust issues.

What this means is that if you’re in the social media space, you’re automatically connected in people’s minds when your competitor has a breach. You can’t sit back and enjoy the schadenfreude of seeing a competitor struggle; you might have some damage control to do as well.

The bright side? Along with damage control comes an opportunity to gain back the trust lost to your industry. Act swiftly and—this is important—with heart. Well over half of consumers feel that large companies address privacy and security concerns primarily to protect their own reputations, rather than to protect the people their businesses rely on. Making people feel protected can strengthen the brand relationship. Trust issues faced by your industry could be turned into a trust-building opportunity for your brand.

Want to learn more about what your customers think about you and your peers in this unprecedented era of interconnectivity?

Drop Grail a line at hello@grailinsights.com. There’s a good chance we’ve already started thinking about you.