Dealing with data breaches is normal for big brands in the retail realm. You only need to scan the headlines to see the latest examples of how large omnichannel retailers and other organizations have had their confidential customer data stolen or compromised by hackers.
These breaches can have a profound impact on shareholder value, as shown by a recent study from by cybersecurity consultant CGI and Oxford Economics that found global investors have lost nearly $52.4 billion due to cyber attacks in recent years. that same study revealed that there is “a significant connection between a severe cyber breach and a company’s share price performance.”
Being hacked typically leads to an average share price decline of 1.8 percent on a permanent basis, and the drop can be much steeper depending on the circumstances. For example, Target’s profit dropped 46 percent resulting in earnings of 81 cents per share as a result of its major breach in 2013. Though company share price tends to recover after a hack, it also tends to rise much slowly thereafter – in general, companies that have been hacked underperform by 42 percent over three years.
Europol Director Rob Wainwright warns that there’s a “growing sophistication in the cybercrime community.” The cyber threat remains persistent despite increased awareness of cybersecurity risks among retail decision-makers. Thus, retailers will continue to face an increased risk of exposure to hackers as they utilize cloud technologies and social media to collect information about their customers.
No matter what means or motivation hackers possess to steal your data, one thing is for certain: The onus is on businesses to be good data custodians and protect their customers’ privacy throughout the customer journey, or face serious consequences in the marketplace and beyond for both themselves and their shareholders.
Leading data security firms like Protegrity can help you in your efforts to tokenize sensitive customer data. Their CEO, Suni Munshani, says, “The reality of our endlessly-connected, always-online lives is that as digital citizens we have no choice but to trust the brands we engage with on a daily basis via mobile apps, websites and connected devices. Corporations collecting customer data must have a heightened sense of responsibility for it, not just from a brand equity perspective should it be leaked, misused or abused, but also from a sense of social responsibility.”
Read the full article here.