Do businesses lose customers after a cyber-attack? It's a pertinent question and the issue of successful cyber-attacks is something many organisations tried to cover up in the past. That is until legislation such as General Data Protection Regulations (GDPR) came into force and mandatorily forced organisations to declare data loss due to a hack within 72 hours of it being discovered. It used to take some companies several months before they came clean.
However, back to the question, and here’s an example of the answer.
- The cyber-attack on the telecoms company TalkTalk in 2015 caused an uproar online. Customers turned to social media networks to express their anger about the loss of service and the theft of their personal data. The company's reputation took a massive hit, not helped by interviews with the hackers who explained how easy it was. The firm claimed it lost around 101,000 customers as a result of the incident. Research from Kantar Worldpanel ComTech suggests 7% of its broadband customers, about 300,000 people, left the firm for another provider.
It’s always the big companies that hog the headlines when it comes to cyber-attacks but what about the millions of smaller businesses who are the backbone of economies all over the world?
- A study from IT industry analysts Forrester, of UK and US companies, found 38% had lost business because of security issues.
- 43% of companies said they had experienced negative customer experiences and reputation loss as a result of a successful cyber-attack according to a study by Radware.
- A global survey of 10,000 individuals carried out by Gemalto claimed 70% of respondents would stop doing business with a company that had experienced a data breach.
The answer to the question is unequivocal and there are clear consequences?
- Reputational loss after a cyber-attack can have a major impact on businesses. While large companies may be able to absorb the loss of customers following a cyber-attack, for small and medium businesses, reputation damage and loss of customers can prove devastating.
- When personal data has been exposed or stolen, customers feel betrayed. Company privacy policies may not be read, but customers believe that any company that collects their personal data has a responsibility to protect it.
A data breach is seen as a breach of the company’s responsibility to keep personal data private and secure, and many customers will take their business elsewhere after such a privacy violation.
Reputational loss after a cyber-attack can also make it hard to find new customers. Once information about a breach has been made public, it can be enough to see potential customers avoid a company.
Steps can naturally be taken to limit customer turnover, repair reputations and win back customer trust, but repairing damage to a brand and winning back customers can be a long uphill struggle.
Given the potential repercussions of a cyber-attack, cybersecurity defences to prevent breaches need to be given serious consideration, and even more so as a second Covid-19 wave breaks upon us. During the first wave, cybercriminals unleashed millions of phishing emails, exploited poor cybersecurity among the millions of people working from home, and developed a raft of new malware such as:
- CoViper a file containing information related to the spread of Covid-19 spread but which actually infected a computer’s boot-up operation and stole passwords.
- Coronavirus maps trojan, which looks like a genuine map but actually planted malware on victims’ computers when clicked on.
- CovidLock which claimed to track nearby Covid-19 patients and encourage victims to install an application, but was actually ransomware that locked up Android smartphones.
Life is difficult enough for small businesses during the pandemic without coming under assault from cybercriminals who are concentrating their efforts on exploiting poor cybersecurity practises, preying on fears and anxieties.
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