New research into consumer trust and spending habits in Europe has shown that organizations face wide-ranging consequences following a data breach, with an average of 40% of consumers saying they will stop spending with a business or brand forever in the event of a hack.
The research, which was conducted by the global provider of secure payment solutions, PCI Pal® across France, Germany, Spain and Italy, found that this was strongest felt in Italy, with almost half (49%) saying they would take their spend elsewhere. This is compared to 43% of those in Spain, 39% in Germany and 27% in France.
A further 47% across Europe said they would stop spending “for at least a few months” following a data security incident with just 4% stating that a security breach ‘wouldn’t stop them shopping there’. This shows that a majority of consumers would question their spending habits in the event of a data breach or cyberattack.
When asked which industries are considered to be the least secure, the financial services sector came out with the most mentions across all European geographies – with 52% of Italians, 48% of Germans, 46% of Spaniards, and 40% of the French respondents suggesting this industry over others. This was closely followed by Government/public sector with a third of all respondents suggesting this sector, closely followed by utilities and travel, with 28% of respondents highlighting their feelings of insecurity towards these types of organization.
When comparing consumer trust in either local or national organizations, the survey highlighted regional variances. In Spain and Italy, there appears to be greater trust with ‘national or corporate companies’ which are considered to follow more stringent security protocols (40% and 38% respectively). While a third of French consumers leaned towards local businesses who they consider to ‘care more about their reputation’, whereas a third (32%) of German consumers felt that hackers won’t target local businesses since ‘they are too small’.
Geoff Forsyth, Chief Information Security Officer, PCI Pal, said, “The survey shows that data security is a significant concern for consumers across Europe, with a majority saying they will take their money and loyalty elsewhere if a data breach occurs. Consumers are growing increasingly uncomfortable with how businesses are managing their data – they want to know more. Over a third (36%) of consumers surveyed in Europe said they directly ask a company about their security practices or do their own research before spending, while almost half (48%) report regretting not better vetting a company’s security practices before parting with their information, and money.”
The Coronavirus pandemic appears to have further heightened consumers concerns; with a third (33%) of UK and European consumers stating that they feel “more concerned” about how businesses are handling their personal data today, compared to before. In addition, 40% of Germans and 38% of Italians specifically said they “would never return” to a business if personal data has been compromised due to a business’ poor data security practices during the pandemic.
This worry is further elevated when asked specifically about sharing payment information with businesses operating remotely. Here, three-quarters of respondents expressed some level of concern, with 28% stating that they are “extremely concerned” about how their payment data is being handled during the pandemic.
Adds Geoff: “These findings should provide a clear and stark warning to businesses that have had to transition contact centers to remote working. Being able to demonstrate that security practices have not taken a back seat during the outbreak is vitally important, to allay any fears that customers may have.
An eBook has been developed that provides a more detailed insight on the survey findings. To download a copy, visit: https://www.pcipal.com/knowledge-centre/ebooks/this-is-europe-consumer-security-ebook.
Download the press release in full here.