New Javelin Research Pinpoints How Institutions Should Respond to Data Breaches

SAN FRANCISCO--(BUSINESS WIRE)--Javelin Strategy & Research announced today results from a new study covering data breach victims, which highlights the acute awareness among consumers about data security and the significant implications security breaches represent to businesses once consumer trust is compromised.

“This current analysis focuses on consumers’ expectations regarding a breached institution, the impact on their financial behavior and their perceptions about identity fraud. With that basis, we present how data breached companies should respond to data leakage incidents and discuss solutions that can be offered.”

“We are well known for our reporting on identity fraud with 5 years of longitudinal data and extensive coverage of key merchant breaches in 2007,” said James Van Dyke, President of Javelin. “This current analysis focuses on consumers’ expectations regarding a breached institution, the impact on their financial behavior and their perceptions about identity fraud. With that basis, we present how data breached companies should respond to data leakage incidents and discuss solutions that can be offered.”

Fraud preventative solutions are designed to avert new accounts fraud before it occurs. The strategic advantage of fraud prevention therefore lies in the ability avoid losses to institutions and consumers.

Key Findings

Javelin’s survey of hundreds of data breach victims, identifies that 55% of consumers experiencing a security breach expressed diminished confidence in the breached organization’s ability to protect and mange their personal data. When consumer confidence is shaken, it weakens relationships with the affected institution, according to Javelin.
Data breach victims (56%) favor a solution that prevents fraud and although there are several solutions available, Javelin identifies the benefits of contacting the consumer, creating an audit trail that law enforcement can utilize, preserving the consumer’s privacy and proving it works.
Providing a fraud protection solution makes a tremendous difference in customer approval of the breached organization’s management and handling of the incident. Javelin data shows that 55% of breach victims that were offered a fraud protection solution were more satisfied with the institution’s handling of the incident, compared to those consumers who were not offered anything.

Key Recommendations

Javelin recommends the following measures that address consumer security concerns and expectations, to institutions in the event of a data breach:

Given the wide variety of fraud protection solutions and varying features out in the market, engage in comprehensive research of the different services available to understand how they play a role in prevention, detection and resolution.
Select a solution that is convenient and easy for the breach victim, in terms of enrollment and use, with an understanding of the impact on preventing new accounts fraud.
Understand that offering a breach solution is a best practice from a customer service standpoint; in other words, do not create a situation in which your customers and/or employees have to request fraud protection assistance. Take a proactive approach by offering the assistance up front.

Download the Research

For a free copy of the research visit www.debix.com/javelin.

Free Vendor-Sponsored Educational Research Webinar

On July 15^th at 10:00am PDT, Javelin plans to present its findings during an educational webinar that will be open to the public, titled: When a Data Breach Occurs, What Do Consumers Expect? Sponsor and co-presenter, Debix, will present its Identity Protection Network, which focuses on building solutions that prevent identity theft and publishing metrics to prove their solution works.

Registration for the webinar can be found at: https://www1.gotomeeting.com/register/254276431.

Methodology

This is sponsored research to a nationally representative consumer audience meeting Javelin’s standards for independence and objectivity. For this study, data was collected and analyzed via an online consumer survey of 400 data breach victims. In addition, Javelin conducted in-depth interviews with breached institutions that had recently implemented a fraud protection solution for affected customers.

About Javelin Strategy & Research

Javelin is the leading independent provider of nationally representative, quantitative research focused exclusively on financial services topics. Based on the most rigorous statistical methodologies, Javelin conducts in-depth primary research studies to pinpoint dynamic risks and opportunities. Javelin helps its clients achieve their business initiatives through three service offerings, including syndicated research subscriptions, custom research projects and strategic consulting. The company’s client list includes some of the largest banks, credit unions and card issuers, as well as significant technology enterprises in the financial services industry.

For more information about Javelin reports, please visit www.javelinstrategy.com/research or call (925) 225-9100 extension 35.