Canadian Underwriter

Canadian consumers unconcerned with data privacy, despite growing cyberattacks, security breaches: Deloitte

May 31, 2017   by Staff

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cyberDespite increasing cyber-attacks and security breaches, the majority of Canadian consumers (73 per cent) are not concerned with their data privacy on a day-to-day basis, according to Deloitte Canada.

However, in its recent report, Privacy for sale – to the highest bidder, Deloitte also found that ninety percent of Canadian consumers would sever ties with an organization if it used data unethically.

Deloitte argues that breaching trust can now be measured by the loss of customers and business. Essentially, the cost of a privacy breach can be measured in the cost of customer acquisition—which can range from five to 25 times more than retaining an existing customer.

Deloitte conducted a global survey of approximately 6,000 individuals across Canada, Chile, Germany, Japan, United Kingdom and the United States. The report examines global consumer attitudes as they relate to how their personal data is collected and used by organizations and how those attitudes shift in exchange for perceived value or incentives.

The report found that while customers aren’t completely comfortable giving their personal information away, they’re reluctantly willing to do so if it allows them to transact conveniently—even if there’s no other perceived benefit.

“In today’s increasingly global business environment, the sheer quantity of available data is growing exponentially and this in turn is increasing the potential that organizations inadvertently violate customer expectations and misuse data. Organizations that fall short of this expectation do risk customer loss,” said Anthony Viel, Managing Partner, Financial Advisory and National Analytics Leader at Deloitte in Canada. “To effectively mitigate breaching stakeholder trust, organizations must devise a strong governance model to ensure employees are managing and using data in a responsible manner to give their customers more value.”

“Most consumers don’t actively pay attention to how their information is being collected and used, because they trust that their data is managed in a responsible manner that aligns with their expectations,” said Sylvia Kingsmill, Partner, Financial Advisory and National Leader of Deloitte’s Data Protection and Privacy Practice. “This approach has the potential for serious misalignment between consumers and organizations and their understanding of the ‘ethical use’ of data.”

Deloitte found that how organizations define what it means to be ethical is based on what consumers feel an organization “should do” compared to what the law dictates, to mitigate risk where privacy and security are concerned. Consequentially, organizations often find themselves navigating grey zones—areas that are legal from a data privacy perspective but could be interpreted as ethically questionable by customers. To avoid missteps, companies need a clearer understanding of their customers and the cultural nuances that influence their ethical norms.

“By creating and promoting a company-wide culture that treats consumer data with integrity—and enforcing it with appropriate policies and procedures—savvy organizations will not only be able to preserve their customers’ trust, they will also have the confidence to connect with those customers in new and innovative ways to deliver them more value and a differentiated customer experience,” said Viel.

This story was originally published by Canadian Insurance Top Broker.