Consumer privacy is a key concern for customers in any industry. People are keenly aware of the data threats that surround them, and they instinctively look for businesses that will take action to protect them. Protecting your customers’ privacy is critically important for many reasons.
Compliance is a Legal Concern
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Protecting consumers’ privacy is a major concern, and one that hasn’t escaped the eye of the legal system. The Federal Trade Commission (FTC) ensures that companies live up to their promises when it comes to keeping customer data safe. The FTC will bring legal action against any businesses that mislead their customers by providing less security than what’s advertised. Section 5 of the FTC Act bans companies from unfair or deceptive commerce practices.
The FTC also ensures that companies maintain all the security provisions required in the Financial Modernization Act of 1999. The Financial Privacy Rule specifies how companies can collect and use customer information. Failure to protect your customers could land you in a costly court case.
Cleanup is Expensive
Protecting your consumer data now is invariably cheaper than the fallout from a data breach. The average total cost of a breach is $4 million. This comes out to about $158 for each record that’s compromised. Data breaches are most expensive in the health care industry, where recovery costs a whopping $355 per record.
Taking proper security precautions now will not only lower your chances of experiencing a breach, it may also minimize your expenses should a breach still occur. Companies with an incident response team in place can save $16 per record, and those with encryption save another $13 per record. Smart security helps you protect your bottom line.
Consumers Lose Trust Quickly
Today’s shoppers are well aware of the ever-present threat of a data breach. After high-profile hacks hit companies like Anthem, eBay, Home Depot, and Target, most people came to the realization that data is never truly safe. However, their knowledge of the threat doesn’t make them any more tolerant of it.
Three quarters of customers will take their business elsewhere if they find that a company is negligent with its data handling. More than half think negatively of organizations that have suffered from a cyber security breach, and 75 percent would stop shopping with a business if their data breach was the result of a lax board in regards to cyber security.
Company Reputations are Fragile
Your company’s reputation is a fragile thing that can sustain lasting damage from even a single instance of poor data security. It’s crucial that you take as many precautions as you can to prevent any type of data breach. Implement extensive data protection measures and share these with your customers so they know their information is safe. Keep a detection team and response plan in place as well, so you can react quickly to any threat and protect your business.
Protecting consumer privacy will serve you well in many ways. Your customers will treat you with more respect and loyalty, and you’ll maintain a healthy bottom line that’s free from the expenses of compromised customer data. Always maintain a proactive approach to your security.