KPMG Consumer Loss Barometer Exposes Data Breach Disconnect

KPMG Survey Reveals After Breach Consumers Want Proof of Fix, CSIOs Want to Apologize

The continuous evolution of digital transformation is outstripping the pace of cyber security in organizations. As a result, the market is witnessing a fundamental disconnect between consumer expectations and concerns, and the ability of organizations to meet those expectations, according to KPMG’s Consumer Loss Barometer report.

The global survey of more than 2,000 consumers and 1,800 Chief Information Security Officers (CISOs) identified a mismatch between the priorities of CISOs and consumers in the event of a breach.

Consumers continue to have reservations about the possible misuse of their private details.  They are more worried about how these breaches will affect them personally and are less concerned about the impact of a breach on an organization. The survey found 69% of consumers reported concerns about their technology being compromised while 37% of consumers reported having their financial information compromised. On the other hand, 2/3 of CISOs say they prioritize financial loss and reputational risk over the impact on customer trust.

“It’s clear that organizations are still prioritizing their bottom line ahead of consumer expectations and concerns, despite the opportunity to use effective cyber security strategy to build consumer confidence and engagement,” says Tony Buffomante, KPMG US Leader, Cyber Security.

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When an apology alone may not suffice

In the event of a breach, consumers prefer proof of a fix (42%) over an apology (24%). Conversely, CISOs say they would prioritize an apology (47%) over provision of those details (8%).

Buffomante continued, “Organizations can redesign the relationship with their customers by placing trust at the center of how they do business. By reinforcing consumer trust, this can actually improve a company’s ability to retain customers and propel growth. ”

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Key sector findings:

• Financial services: Almost half (48%) of consumers believe their financial institutions have full or joint responsibility for ensuring that mobile devices used for banking are secure. Regardless if financial institutions see it as their responsibility, they need to show they take the security of their customers’ personal information seriously.
• Automotive: 56% of consumers are worried about their car being hacked now whereas 73% are concerned about being hacked five years from now. For a car manufacturer to succeed, it needs to build trust in its ecosystem data security. Car makers are being held accountable for trust in a complex ecosystem – where dealers, software vendors, hardware vendors, telecommunications providers and, ultimately consumers, all have differing perspectives of the role they play in ensuring vehicle security.
• Retail: Alarmingly, 71% of consumers are more concerned about retailers misusing their personal information than information being taken by hackers (68%). This highlights a societal lack of trust in business that organizations must address.

Other notable findings:

• Value within the organization: The vast majority, 83%, of CISO respondents brief the board on at least a quarterly or semi-annual basis demonstrating that executives now rate cyber security threats as a significant risk to organizational growth. But when cyber is omitted from the digital business value chain, a trust ecosystem is not delivered and a significant commercial opportunity is missed.
• Cloud and connected devices: 75% of consumers believe there should be additional security and privacy measures embedded into the design of their connected devices. But this does not necessarily translate into action: only 35% limited the use of sensitive, personal data on their devices and only 35% were willing to pay a higher price for more secure devices.
• Mobile technologies: 75% of consumers said they were concerned about theft or misuse of personal information collected by their mobile device. Mobile device makers and network providers can differentiate themselves by building consumer trust in digital channels for such sectors as healthcare and banking, not just in the mobile products and services they provide.

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