The fallout suffered by companies that experience data breaches is expansive, but one of the largest areas of impact is customer trust. Brand value is greatly lowered in the event of a security breach — even when decisive action is taken to shut down the fraudulent activity and minimize the damage as quickly as possible. And while brand value can be difficult to quantify, several studies have revealed the effects of data breaches on consumer trust — a key indicator of a brand's strength.
We have combed through the available data and compiled relevant research on the subject. Below find a brief synopsis of three studies and their findings:
"Fallout: The Reputational Impact of IT Risk" — Report by Forbes Insights
Another interesting finding in relation to brand value in the event of a data breach is that it may not be top-of-mind for c-level executives. The Ponemon study found that 5 percent of IT practitioners and 42 percent of CMOs don’t believe that brand protection is taken seriously in the c-suite. The same study found that breaches rank in the top-three most negative impacts to brand reputation. The top two are, respectively, bad customer service and environmental disaster.
As illustrated above, the less tangible effects of fraud (such as a negative shift in consumers' feelings about a brand) are very real. While creating a security breach action plan, it's critical to factor in an effective PR strategy in an effort to rebuild customer trust as quickly as possible post-breach in order to successfully retain as many customers as possible.
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