Minding the Store Customer Data

Businesses that fail to protect their customers’ data risk losing sales and customer relationships, according to a new study.

Identity Finder – a firm that offers software to protect sensitive data – said it commissioned a survey looking into the impact of data breaches on customer behavior.

It’s a timely subject, since last year’s massive customer data breaches at some big retailers (including Target) put the issue in the news as never before. Much of the news focused on the immediate cost of fixing the breaches, but what about the long-term impact on customer trust?

Well, the survey results indicate that this long-term impact may be severe, indeed: Identity Finder found that 33% of consumers surveyed said they would shop elsewhere if their retailer of choice is breached.

It’s not just retailers who should be worried; healthcare providers and financial services firms would also lose customers in the event of a data breach. In the survey, 30% of patients said they would find new a healthcare provider if hospital/doctor’s office is breached, while 24% of consumers will switch bank/credit card providers if institution is breached.

The immediate cost of last year’s data breaches ran into the hundreds of millions. Not only did the stores need to implement fast fixes, but banks, credit unions and big payments systems all had to scramble to ensure that customers were protected.

What this study shows is that the massive cost of these breaches will likely continue long after the initial attacks are mitigated. Businesses that rely on card payments need to step up their security game.