Consumers are increasingly fed up with fears of their personal data being compromised virtually every time they make a purchase—and new research from global comms consultancy Ketchum shows that the brands and businesses that endanger their customers’ privacy are taking real reputation risks with security shortfalls.
While there hasn’t been an Equifax-level incident in a while, it doesn’t mean people aren’t just as concerned today that their security will be jeopardized in a breach—indeed, the Ketchum data reveals that 55 percent of Americans report feeling worse about data breaches in the last 12 months, and 49 percent say they feel worse about the privacy of their personal data.
The distrust is real—nearly half of consumers are skeptical when brands say they keep consumer data safe
The firm’s second annual 2019 Social Permission and Technology study also reveals that 48 percent reported they don’t believe companies when they say their data is protected, and 49 percent don’t believe companies when they declare data breach issues are resolved.
The study points to both reputational and business risk for brands whose business models depend on consumer data. Nearly 9 in 10 consumers (89 percent) believe that there needs to be more legislation around data privacy, and that companies should be fined for data breaches. A majority (59 percent) also believe that large tech companies should be broken up.
Further, with 4 in 10 consumers (41 percent) disagreeing that laws are capable of keeping up with technological advancements, people are taking matters into their own hands:
- 60 percent have deleted an app from their phone in the last twelve months
- 47 percent have created more complex passwords
- 40 percent have turned off location tracking
- 34 percent report using social media accounts less frequently
This distrust by consumers is seemingly being ignored by brands at possible huge reputational risk
When it comes to protecting consumers’ data, 74 percent of survey respondents said companies haven’t improved or have gotten worse in the last year.
“We found two particularly fascinating takeaways in this year’s study,” said Melissa Kinch, managing director of Technology at Ketchum, in a news release. “First, the same proportion of people (66 percent) are worried about data privacy as are concerned about data security. This is a wake-up call for many brands who believe that cyber security is their biggest reputational risk when it comes to data and are in danger of leaving themselves vulnerable when it comes to privacy policies. Second, people don’t trust brands when they say their data is safe, suggesting there has already been a significant erosion of trust as a result of high-profile privacy lapses.”
Tech companies lag behind
Consumers are most trusting of companies within industries that have historically had access to sensitive personal data. One-third of consumers (33 percent) said they trust healthcare providers more than any other type of company with their personal information, followed closely by banks (32 percent). Other industries that have earned consumer trust include health insurance (27 percent), property and life insurance (17 percent), and security companies (14 percent).
In contrast, consumers are more wary of “big tech” companies and startups. Only 7 percent of consumers say they are most trusting of social media apps, and 6 percent most trust wellness, fitness and smart home apps and devices. A mere 4 percent are most trusting of search browsers, and 3 percent most trust telecom companies or app-based transportation providers.
Perhaps most telling is the 25 percent of consumers who say they don’t trust any industry with their personal data—demonstrating that for a quarter of the population, the reputational damage has already been done.
‘Techruptors’ call for more oversight and legislation
Last year’s inaugural Social Permission and Technology study revealed the emergence of a group of consumers who are most likely to bring disruption to the technology industry. These “Techruptors” tend to be young digital natives who both understand technology and use more tech products and services than the general population—including ride sharing, entertainment streaming, wearable technology and virtual assistants.
The 2019 study found that like the majority of Americans, Techruptors also have growing concerns related to their online privacy and are in favor of legislation that regulates companies’ use of their personal data. Compared to 12 months ago, half of Techruptors feel worse about data privacy (50 percent), data breaches (50 percent) and location tracking without their knowledge (49 percent).
That increasing concern about companies’ ability to self-police may be the reason that 87 percent of Techruptors agree that there should be more legislation around data privacy, and 83 percent believe in more government regulation on data.
Communicators must act now
Given this emerging firestorm of data protection activists, what can communicators do to prepare their organizations for advanced levels of scrutiny or even consumer activism? Ketchum alerts comms teams to five key steps they must take, right now:
Alert the C-suite
Communicators need to insert themselves into conversations on this topic at the highest levels of the organization. Discussing the results of this study might be a good place to start.
Analyze your stakeholders
By auditing what consumers—and your employees—know or don’t know about your company’s data-related activities, you’ll have a better understanding of potential problem areas to address. Relatedly, identify who among your stakeholders are Techruptors and engage with them, listen to them, sooner vs later.branding
Conduct a risk assessment
Building on the previous step, conduct a thorough risk assessment based on stakeholder knowledge and concerns about your data practices, as well as the strengths of the practices themselves. Once you’ve identified the key risks, you can develop an approach to address those topics with these constituencies, especially the Techruptors.
Fight for transparency
This may be your toughest challenge. But if you can convince internal stakeholders to proactively share transparent data policies and practices, that will eliminate much of the mystery surrounding them—and convince stakeholders you care about, and are taking steps to address, their data concerns.
Don’t hide behind legal speak
Multi-page consent forms no one reads won’t save your reputation long-term. Data collection today is protected by legal speak, but your reputation needs to be protected by honesty and transparency.
“Techruptors are a powerful group of consumers that truly understand the technology landscape and are passionate advocates for the safety of their personal information. They are taking action to ensure their own data security, they are influencing others to do the same, and they are at the forefront of calls for government to step in and regulate,” said Lisa Sullivan, director of Technology at Ketchum, in the release.
“Brands would be wise to take note: these Techruptors are often not only their earliest adopters and most outspoken consumers, but also share many characteristics with the employees within their own walls,” Sullivan added. “Listening to, understanding, and engaging with this vital and vocal audience has the potential to insulate brands from both external and internal reputational threats.”
Ketchum’s Analytics team conducted the second annual Social Permission and Technology Study, an online omnibus survey of 1,022 adults age 18+ in the United States, between August 20, 2019 and August 23, 2019. When necessary, the data was weighted to be nationally representative of the U.S. population as it relates to age, gender, region, race/ethnicity, education and income. The margin of error for the total sample is +/-3.1 percentage points at the 95 percent confidence level. Smaller subgroups will have larger error margins.