Financial Post Feature: Inadequate Data Security Practices Come with Serious Financial Consequences for Canadian Businesses
PCI Pal has been featured on financialpost.com.
Over one-third of Canadian consumers have experienced the consequences of a security breach or hack, according to newly released research conducted by secure payments provider to contact centers, PCI Pal. The findings suggest that a combination of recent high-profile breaches, media coverage of new data privacy regulations such as GDPR and Canada’s Personal Information Protection and Electronic Documents Act, and personal experience have made security a top concern for Canadian consumers.
“As data breaches become increasingly common, Canadian consumers are realizing that their personal data is at the mercy of the organizations they shop with. As a result, attitudes toward data security are changing significantly, with a majority of consumers now reporting a company’s security practices directly influence their spending habits,” says James Barham, CEO, PCI Pal.
The research found that 78 percent of consumers will stop spending with a business following a data breach, with 58 percent reporting that they would avoid a company that’s been hacked for several months, and a fifth saying they would never return. This research provides a serious warning as to the implications of a breach for consumer-facing businesses operating in Canada.
Consumers also reported that simply perceiving a company as having insufficient security practices impacts their trust and spending behaviors, with 30 percent reporting they would spend more with an organization they perceive to be trusted and secure, and 35 percent claiming they would either spend less or stop spending completely with those they believe may have insecure security practices.
The findings suggest it’s not just online threats that worry Canadian consumers. When it comes to obtaining data, conducting transactions via the telephone securely is also top of mind – 42 percent feel uncomfortable sharing credit card information over the phone, and 58 percent are only comfortable sharing information over the phone to select companies that they either trust or have verified their security measures. For businesses taking Cardholder Not Present (CNP) payments over the phone, these findings underscore the importance of investing in technology that prevents customers from having to share their sensitive information in an insecure way.
With consumers increasingly wary of businesses’ data privacy practices, the survey also examined what would make consumers feel better about data security. Over half (62%) want companies to undergo regular security audits, another half would feel safer if sensitive personal information was not required for every transaction, and 49% of consumers would feel better if businesses were federally mandated by stricter regulation to protect their data.
Barham continues: “Given the increase in data breaches, it’s unsurprising that consumers are increasingly paying attention to the data security practices of companies they buy from. Our research found that 61 percent believe it is important to vet a company’s security processes before giving their information, and 24 percent will go so far as to ask a company directly about their security practices. As these concerns become top of mind for consumers, it will be wise for businesses to adopt and promote stronger security practices, or risk losing customer loyalty.”
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