How data breaches can trigger a massive client exodus for banks
Nilesh Mistry, head of Asia Pacific and Vice President, WWT, discusses how data breaches can affect even the most prepared institutions.
Posted by Asian Banking & Finance on February 7, 2018:
From breaking trust to breaking banks, digital attacks are becoming more powerful than ever.
When it comes to customer retention, data attacks could possibly be the worst nightmare for any company. Thousands of clients around the globe have already left compromised banks for those with a cleaner track record. In fact, seven in ten customers will not think twice to leave their bank once a data breach occurs, making customer loyalty one of the major casualties of a brittle digital backbone. Almost 90% of organisations globally have revealed being affected by new DDoS-enabled breaches.
Due to the presence of the five largest banks in the world as well as the highest penetration rates for mobile banking and mobile payments, Asia remains the most vulnerable to security attacks. Add to this reputation the region’s feeble policy-making, weak regulatory environments, and subpar enforcement, and it becomes a haven for notorious cybercriminals.
In general, financial institutions, wherever they are located, have it worse when it comes to data breaches. According to the 2017 Cost of Data Breach Study by Ponemon Insitute LLC and IBM Security, financial institutions incur an estimated $245 per stolen record, way above the global average of $141.
According to Nilesh Mistry, head of Asia Pacific & vice president, World Wide Technology, Inc., even organisations with hefty cybersecurity budgets and mature risk management, governance, and privacy programs are affected. It is thus important for organisations to clearly understand their legal obligations, particularly in preparation for compliance with standards, frameworks, and regulations.
Robin Schmitt, general manager, Asia-Pacific at Neustar, said that the fear of reputational damage and loss of customer trust are the key drivers behind the increase in DDoS defense investments in the region. Two in ten respondents to Neustar’s survey, strengthened their DDoS defenses to preserve customer loyalty and confidence.