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Data Security and Privacy Concerns Impacting What People Buy, Where They Do Business

Data Security and Privacy Concerns Impacting What People Buy, Where They Do Business

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Published by Edelman
New Edelman survey reveals mounting ramifications for business and serious consequences when trust is breached
New Edelman survey reveals mounting ramifications for business and serious consequences when trust is breached

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Published by: Edelman on Mar 07, 2012
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11/17/2013

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CONTACT:Michael Bush212.729.2181michael.bush@edelman.com
Data Security and Privacy Concerns Impacting What People Buy,Where They Do Business
New Edelman survey reveals mounting ramifications for business and serious consequences when trust is breached 
March 7, 2012, NEW YORK
 –
In the wake of several high profile data breaches and privacy
incidents, a new Edelman study, “Privacy & Security: The New Drivers of Brand, Reputationand Action Global Insights 2012,” reveals that concerns about data security and privacy are
impacting what people buy and which companies they do business with. Data security andprivacy are also pressing matters of public policy, with leaders from around the world
demanding enhanced protections. From the Obama Administration’s call for a Privacy Bill of Rights to the European Commission’s proposal of new comprehensiv
e rules for the
protection of personal data and the Asia Pacific Economic Cooperative’s development of a
new privacy framework, businesses now face more scrutiny on these issues than everbefore.
Concerns about data security and privacy are not merely theoretical. Around the world,people feel that their personal information is not adequately protected and that companies
are unchecked, so it’s no surprise that they are now taking data security and privacy
considerations into account when they shop.
 
The study reveals that 70% of people are moreconcerned about privacy than they were five years ago and 68% feel they have lost controlover how their information is shared and used by businesses. These concerns are impactingtheir decisions at the checkout counter. Individuals are even weighing considerations about
security and privacy as heavily as those relating to a product’s design, style, and physical
dimensions.
 
 
For instance, when shopping for smartphones, nearly one in two people (48%) report thatdata security is one of the top three factors in their purchasing decision, a consideration thatproved important for more people than the style, design, warranty, and size of the product.Data security and privacy considerations are also impacting other purchasing decisions. Onein two people buying a personal computer and 42% of those shopping for tablet computerssay that data security is among their top three considerations
 –
for the former, outweighingthe physical dimensions, style, and design of the device and for the latter, factoring in almostequally.
“The message of this study is clear,” said Pete Pedersen,
c
hairman of Edelman’s
globalTechnology p
ractice. “Business leaders must begin to think about
managing data securityand privacy as a core competency
 –
 
one that has real potential to affect a company’s bottom
lin
e.”
The fallout for businesses is not limited to those in the technology sector.
Edelman’s industry
study also indicates that people around the world are hesitant to do business with
any 
 company they perceive is incapable of protecting their data. Nearly half (46%) of thosesurveyed report leaving or avoiding companies that have suffered a security breach. In thewake of a data breach, individuals are even willing to abandon the companies they trustmost. Globally, Americans are the most reluctant consumers to part ways with businesses towhich they are loyal, yet one in two say they are likely to change brands after a data breach.The potential for customers to jump ship increases for companies that lack brand loyalty,with 70% saying they would switch providers after such an event.Data security and privacy concerns are also impacting
peoples’
trust in business. Shoppingand banking are the most popular online activities, and while data security in these industriesis important to many consumers, far fewer say they actually trust banks and online retailersto protect their personal information. So, while 92% of people globally consider data securityand privacy important in the financial industry, just 69% trust financial institutions toadequately protect their personal information: a 23 point gap. Online retailers fared evenworse. While 84% indicate the security of their personal information is important to them

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