Consumers Won’t Stand For Data Breaches

Financial sector CIOs take note — institutions such as banks and credit unions face serious repercussions should they suffer a data security breach, according to the 2005 EDS Financial Services Privacy and Customer Relationship Management Survey.

The survey indicates that 21 percent of consumers would close all accounts and move their business to another financial institution if their personal information were compromised, and a further seven percent would close some accounts and use another bank. Fifty-four percent would discontinue banking until they felt the crisis was resolved.

“The consequences are severe for any financial institution that experiences a security breach that leads to a leak of personal information,” says Chris Lord, EDS’ senior vice president, Canadian Financial Services industry. “Our survey clearly shows that consumers demand strong security and privacy measures, and banks and other financial service providers must rise to the challenge or risk losing their customers.”

According to Lord, the survey demonstrates that consumers are acutely aware of how their personal data is protected and they have intense opinions on their privacy rights.

“With the recent and widespread coverage of high-profile security breaches, consumers have started taking action to ensure their personal information is protected,” said Lord. “Consumers have become the primary driving force of security and privacy initiatives and this not only affects financial institutions but it also affects the methods organizations use to collect data for marketing functions as well.”

By CIO Canada Staff