Research pinpoints how institutions should respond to data breaches

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.

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.