IABC Café

Although it seems intuitive that a corporation’s reputation can be adversely impacted if it doesn’t secure confidential information about its customers, a new report provides some firm data. The Chief Marketing Officer (CMO) Council and the Business Performance Management (BPM) Forum have collaborated on a study that examines how incidences like the following from this year are eroding consumers’ trust in brands:

• Jan. 12: People’s Bank loses a computer tape containing names, addresses, Social Security numbers and checking account numbers of 90,000 customers.
• Feb. 9: Hackers expose and steal 200,000 debit card accounts from banks (including CitiBank, Bank of America and Wells Fargo) and credit unions.
• Mar. 23: A stolen laptop of a Fidelity Investments employee contains names, addresses, birth dates, Social Security numbers and other information of 196,000 Hewlett Packard, Compaq and DEC retirement account customers.
• June 1: An Ernst & Young employee’s laptop containing data of 243,000 Hotels.com customers is stolen in Texas.

“Secure the Trust of Your Brand™,” is the study that includes “insights from C-level executives and senior marketing decision makers and delivers the first 360-degree view of the impact of digital security and infrastructure integrity on corporate reputations,” according to a press release.

I’m particularly interested in the report because I’m moving forward on a plan to secure support within my company for the introduction of social media, including RSS feeds, instant messaging, blogging and wikis. I’m encouraged that our IT Department is planning to roll out, in Q1 2007, a new version of Microsoft’s SharePoint collaboration tool. Because we are a financial services company, data security is one of the key considerations for any application or process change. I need to be ready to address concerns that company management may surface.

The “Secure the Trust” report points out what companies can and should do to protect and enhance their brands in this digital world. The report includes data collected in the U.S. and Europe (U.K., France, Germany, Spain and Italy) via surveys conducted by Opinion Research Corporation from April 25 to May 7. More than 1,000 consumers were surveyed in the U.S. and 1,203 consumers were surveyed in Europe. The statistical confidence interval for the U.S. and the European results is plus or minus 3% at a 95% level of significance, according to the study authors.

Consumers expressed their level of concern regarding information security, their top security issues, and whether they personally have experience with security breaches. Key findings include :

• Security concerns among consumers are rising—particularly among those who have experienced breaches firsthand.
• Two-thirds (65 percent) of European and U.S. respondents, on average, have experienced computer security problems such as viruses and spyware.
• One in six respondents have had their personal information lost or compromised.

The survey respondents expressed the willingness to take action when they felt that their personal information might be in jeopardy:

• Forty percent of respondents have actually stopped a transaction online, on the phone or in a store due to a security concern.
• Over a third say they would strongly consider taking their business elsewhere if their personal information were compromised.
• One quarter of them would definitely take their business elsewhere if their personal information were compromised.

U.S. consumers are particularly worried about identity theft and fraud, which top all security concerns, even personal safety and terrorist attacks, according to the report authors. Concern about identity theft ranks significantly lower among Europeans.

For the most part, companies have yet to break through on using security as a competitive advantage in the marketplace: A minority of consumers—on average about a third—rate companies highly on how effectively they communicate regarding issues of security, the report states.

Few respondents could name a “most trusted” brand in terms of security, or for that matter a “least trusted” brand.

The report quotes a U.S. Federal Trade Commission statistic that about 10 million Americans each year become victims of ID theft, with the annual loss per victim at $5,885. Total loss from identity fraud per year rose from $53.2 billion in 2003 to $54.4 billion in 2005.

This entry was posted on Monday, August 7th, 2006 at 6:56 am and is filed under General, IABC. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.