Protecting Personal Information a Priority for Building a Strong Reputation
Americans say that a financial firm’s failure to protect personal data is more likely to have a negative impact on their reputation than failing to fulfil their ethical responsibilities to customers and the community. According to the 2015 Makovsky Wall Street Reputation Study, more than two-in-five (42%) consumers identify failure to protect their personal data as the biggest threat to a financial firm’s reputation. And, this is prioritized above the ethical responsibility businesses have to customers and the community (23%). Eighty-three percent of executives agree the biggest issue faced in building a strong reputation over the next 12 months is their company’s ability to combat cyber threats and protect personal data.
This study is the fifth annual survey by Makovsky and Ebiquity about the reputations of banks and other financial firms. For the first year, alongside executives in the finance industry, the study includes the perspectives of the consumer in terms of their regular contact with their local bank, mortgage, a loan company, insurance agency, and credit card issuers.
Executives Prepare to Recover Business Losses; Renewed Trust is a Must
Most executives at financial firms ‘get it’ – they are preparing to avoid even more business loss. They understand that protecting personal data is essential to building a strong reputation, and is an important future focus. More than two-in-five (44%) have already lost 20% percent or more of their business over the past 12 months due to reputation and customer satisfaction issues. More than one-half (57%) of executives said a future major data breach would have a serious negative impact on their reputation.
Most executives are concerned about losing customers to alternative financial services providers. After all, consumers remember the unstable economy beginning nearly seven years ago and the impact it had on their lifestyles. As the survey results reveal, sixty-one percent of consumers still do not fully trust the financial firms they conduct business with on a regular basis.
Consumers Switching Financial Services Providers is a Strong Concern
The financial crisis has had a strong effect on consumers’ lifestyles, including creating barriers to saving or the need to live paycheck to paycheck (29%). As well as spending cut-backs (26%), financial hardship (24%), and diminished retirement (22%).
More than three-in-four (77%) executives are concerned about losing customers to companies like Apple, Google, Amazon, Lending Club, etc., who could offer alternative financial services. Their concerns are valid as nearly three-fourths (73%) of consumers would likely switch to an alternative financial provider should there be a breach of their personal and financial information. Two-thirds (68%) would also consider switching given negative news (illegal activity, fines, etc.) about their current financial services firms.
Executives are marching forward with the notion that achieving trust, making the appropriate judgments related to data security, and being transparent will lead to a stronger reputation for financial institutions. Eight-in-ten (81%) executives agree increased regulations will improve their reputations and trust with customers faster.
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