Data Breaches and How to Build Consumer Trust

Arcane Blog Post

Data Breaches and How to Build Consumer Trust

Data Breaches and How to Build Consumer Trust


Recent events with Facebook have once again put into question how secure our data really is.

Last week, the world’s most powerful social network was at the centre of a privacy scandal. A whistleblower alleged that Facebook provided data from fifty million Facebook accounts to data firm, Cambridge Analytica, who misused the information to target American voters in the 2016 presidential election.

“We reject any suggestion of violation of the consent decree. We respected the privacy settings that people had in place. Privacy and data protections are fundamental to every decision we make,”

Facebook said in a statement.

In today’s world of big data and information, privacy has become the centre of attention. According to a study from the Pew Research Center, 64% of Americans have personally experienced a major data breach. It’s clear that the public lacks faith in government and private-sector organizations when it comes to protecting their data — and for good reason.

Facebook has not been the only company involved in a privacy scandal, though. In 2017 alone, Equifax had a disastrous breach, Yahoo finally admitted that all three billion of its email accounts were compromised, and Uber attempted to conceal a breach that affected fifty-seven million accounts.

Privacy Leaks — What Do They Cost?

Data privacy and security compliance are no longer areas in which companies can afford to be lazy. The average total cost of a data breach in the US was $7.5 million/breach, which doesn’t even include indirect costs like litigation, damage to company databases, and effects on brand reputation.

Recovery of brand reputation is especially difficult to handle, but take Yahoo and Home Depot as examples of how to communicate during a data breach. Companies can make efforts to provide consumers reassurance about their privacy before, during, and after a breach.

Prevent a breach

by periodically analyzing and updating security systems and destroying consumer data when not needed. Before any issues occur, companies must set clear protocols on how to handle any breach.

Control the damage after a breach

by isolating the problem and implementing solutions to the protection, discovery, and treatment of breaches.

After the breach

develop an integrated approach to data governance led by a C-level executive.

How Do I Earn Consumer Trust?

A recent Deloitte study shows that consumers are willing to share their data as long as companies are:

  • Transparent about how they intend to use consumer data
  • Allow consumers to easily opt out of data sharing
  • Provide brief and readily understandable privacy policies and agreements

The percentage of consumers who were open to sharing certain information — in this case, browsing history and social media activity — doubled between 2014 and 2016.

A Conclusive Example

WebMD is a great example of a company who delicately receives and handles extremely private user information. The site prominently features logos of third-party privacy and security compliance verifiers, such as TRUSTe. This makes the user feel safer when entering information, whether or not they recognize the security symbols.

Users can also see a short summary of the privacy policy at the top of the page, with a link to the full statement underneath, allowing consumers to quickly grasp how their information will be treated.

WebMD puts the ball in the consumer’s court to decide what information they wish to disclose, providing the information and tools to allow consumers to opt in or out of sharing their data.

Many choose to share their data, offering up a wealth of personal data that WebMD uses to more effectively tailor its content — and advertisements — to the user’s needs. For example, you can use WebMD without providing any information, but for a personalized experience, you need to disclose something. Being able to use the service before parting with their privacy allows users to get comfortable first before diving in.

It is important to understand the data and consumer in this way to minimize the likelihood and impact of a breach. Establishing comfort and trust will help brands learn more information about their customers and will initiate better data security practices.


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