Many American business big shots just aren’t taking their online vulnerability seriously.

And they don’t understand how customers and employees now view data breaches.

Those are some of the conclusions of several recent studies, including one from Shred-it, an information security company.

Ignorance Is Bliss for Some Businesses

American businesses are ignoring “the serious impact any data breach can have on their reputations and bottom line,” according to the latest Shred-it report.

Shred-it, which interviewed 100 corporate executives, 1,000 small business owners and 2,000 members of the general public, said business relationships can be fragile. Indeed, a few hackers could ruin years of customer good will.

For example, thirty five percent of customers indicated “they would lose trust in an organization following a data breach,” Shred-it said.

Covering It Up

Shred-it also found that “66% of Americans do not believe that all digital data breaches are disclosed.” That could also affect key employees. A large percentage of employees also said that they would consider leaving a company that had a data breach.

Gemalto, a digital security company, found an interesting anomaly: Customers are willing to take risks online. However, if anything goes wrong, they are going to blame the company for any of their problems.

Only 29 percent believe companies will make serious efforts to protect data and 58 percent think data will be breached, according to the survey of 9,000 customers. Two-thirds of those interviewed told Gemalto they will not work with companies that have data breaches.

Shred-it officials found three themes: “a growing sense of denial among business leaders that information security is a real concern; a growing risk among every company’s employee base that breaches could impact retention; and a growing willingness among the general public to hold any company suffering a breach accountable.”

Coming to America—to Break into Computers

And American companies are having lots of problems, these investigations showed. Over the last decade, about 10,000 data breaches occurred in the United States. These breaches resulted in some 11 billion records and $16 trillion stolen, Comparitech said.

“These breaches,” according to Dr. Larry Ponemon, the founder of the Ponemon Institute and a contributor to the Shred-it report, “are costly to remediate and can result in the loss of customer loyalty.”

And the problems go coast to coast.

Comparitech said California recorded the largest number of data breaches. New York is second.

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Gregory Bresiger
Gregory Bresiger

Gregory Bresiger is an independent financial journalist from Queens, New York. His articles have appeared in publications such as Financial Planner Magazine and The New York Post.

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