A KPMG survey reveals that 90% of Canadians are ‘leery’ of sharing their personal data with an organization that has suffered a cyberattack or data breach, and 84% would consider moving their business to a competitor following a breach. A quarter of respondents report having had their login credentials stolen from a trusted site that experienced a breach, and 38% are not confident that their personal information can be kept safe.
The survey supports something Cyberhedge has seen in its ratings for years: the risk of costly brand reputation damage due to poor cyber is real.
Previous reports have discussed the willingness of customers to switch service providers following cyberattacks which result in systems disruptions. KPMG’s survey reveals that consumers are becoming ever more concerned about companies’ cyber security, and an increasing percentage are willing to move their business following a breach. Considering the high customer acquisition costs most companies face, customer attrition is another cost that must be factored in by C-Suites as they assess the sufficiency of their cyber security investments. The extremely high and rising percentage of customers willing to move their business should be a wake-up call to corporate leaders. But evidence suggests that most companies continue to be behind the curve on giving this business risk the priority that it deserves.
Cyberhedge data shows the material degree that companies with superior cyber governance already outperform those with poor cyber governance. We have discussed the ‘hidden’ cost of breaches before. C-Suites that focus on the direct costs of a breach — hardware and software systems repair, legal and regulatory fines — are badly underpricing the true cost of a breach, especially significant data breaches like Marriott and ransomware. Add the cost of damaged reputations, the loss of customers and revenue, which as this survey indicates is increasingly significant, and the divergence between market outperformers and underperformers will continue, and probably widen further.