Do customers punish breached companies?

2017-11-14T17:11:50+00:0014/11/2017|Tags: , |

DARK Reading reported an interesting news on a direct measure of the damages that a data breach has on an intangible asset: “Equifax’s 25% reduction in share value and other industry-wide stats show that consumers aren’t so apathetic about cybersecurity after all. […] growing evidence is showing that customers really do care, and they’ll put a wallop on the brand when the circumstances are egregious enough.” You can read the full article on DARK Reading.

This news adds to a study released in September by YouGov BrandIndex that tracked brand scoring of a number of major brands following a mega breach in recent years. Equifax saw the most precipitous drop in brand scoring, but other companies like Anthem Blue Cross, Home Depot, and Ebay all saw attrition to their scores in the wake of a breach.

Earlier this year, Ponemon Institute studied 113 companies, concluding that they suffered an average 5% drop in stock value following the disclosure of a breach.

Although big companies’ stock valuations quickly recover from the effects of serucity breaches, this could be untrue for small and medium-sized enterprises, hence the special focus Hermeneut has on SMEs.