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Easing Fears in Wake of Data Breach Should be Priority, Says Researcher

Two of the studies surveyed how consumers reacted to the scope of a data breach

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Easing fears in the wake of a data breach should be a priority, the researchers said. Pixabay

Once a data breach is reported, people who are fearful quickly become sensitive towards the size and scope of the breach than those who get angry, finds a study led by Indian-origin researchers.

The findings also extend to the stock market where a company’s stock price can be influenced by the size of the breach when the news coverage emphasizes fear, rather than anger.

“The emotions of fear and anger will elicit different reactions. In the wake of a data breach, we wanted to explore those different reactions and see if people acted to protect themselves or directed feelings toward those responsible,” said Subimal Chatterjee, distinguished professor in marketing at Binghamton University in New York.

Chatterjee partnered with Sumantra Sarkar, assistant professor of management information systems and others to conduct three studies to get to their findings. Two of the studies surveyed how consumers reacted to the scope of a data breach.

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They found that only the customers who felt fear after a breach were sensitive to the size and scope of the breach, while scope didn’t matter to angry consumers. Pixabay

They found that only the customers who felt fear after a breach were sensitive to the size and scope of the breach, while scope didn’t matter to angry consumers. “Fearful consumers were sensitive to knowing, for example, if the breach only affected 100 customers or 10 million customers, and we found that the larger the scope, the larger the reaction,” said Chatterjee.

Meanwhile, angry consumers didn’t care if it was 10 customers or 10 million customers. “Their focus wasn’t on the scope. They were directing their focus and anger on the perpetrator,” Chatterjee added.

A third study examined 12,000 news stories about data breaches. Testing for keywords that suggested either a fearful or angry response in the coverage, the researchers then compared the findings to stock prices for affected companies at the time of the coverage.

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They also recommend being extra careful about how you communicate the scope of the data breach, as fearful customers will be very sensitive to the size of breaches. Pixabay

They found that the stock market reacts similarly to how consumers react: Fear makes the stock market sensitive to the scope of a data breach, while anger makes the stock market insensitive to the scope of a data breach.

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Easing fears in the wake of a data breach should be a priority, the researchers said. They also recommend being extra careful about how you communicate the scope of the data breach, as fearful customers will be very sensitive to the size of breaches.

“If you have 500 million customers that were affected by a breach, but it only represents around 16 per cent of your customer base, you may want to focus on that smaller number in your communications to minimize the threat to fearful customers,” Chatterjee noted in the paper published in the Journal of Business Research. (IANS)

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Reportedly, India Receives 5 lakh Cyber Security Alerts Daily

While India speeds up it's mission to transform into a digital economy with upgraded technologies, the country faces one of the highest rates of cyber security threats in the Asia Pacific region.

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Cyber Security
India faces one of the highest rates of cyber security threats in the Asia Pacific region. Pixabay

As India speeds up its mission to transform into a truly digital economy with technologies like 5G, the country faces one of the highest rates of cyber security threats in the Asia Pacific region — receiving over 500,000 security alerts daily — which is nearly three times the global average, a new report said on Monday.

According to a joint KPMG in India-Indian Mobile Congress-COAI report released on the first day of “IMC 2019” here, organizations need to be open with consumers about their data being collected as cybercrimes grow.

The impact of a data breach to an organisation averaged $3.9 million globally in 2018; it was around $1.83 million in India last year.

“Nearly 39 per cent of security alerts remain unattended owing to the lack of relevant skill-sets. Though there are approximately 600,000 digitally skilled employees in India, only 10-12 per cent have cybersecurity skills, while even fewer have data protection and privacy skills,” lamented the report.

The skill gap may increase further with rapid digitalization and is being cited as one of main reasons for not adopting advanced security practices and technology.

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There are approximately 600,000 digitally skilled employees in India, only 10-12 per cent have Cyber security skills. Pixabay

“Here, it has become essential for organizations to offer relevant training to upskill and reskill employees,” said the report.

To add to their burden, more than half the security alerts investigated by organisations turned out to be false. This experts additional pressure on cybersecurity personnel.

“As India speeds up its mission to transform into a truly digital economic, cybersecurity threats and privacy concerns could impede its success,” said the report.

All stakeholders involved (government, industry, consumers and regulators) should consider implementation of advanced cybersecurity technologies.

Cyber Threat
As India speeds up its mission to transform into a truly digital economic, Cyber Security threats and privacy concerns could impede its success. Pixabay

“Considering the rising threats of the digital age, organisations need to have a comprehensive security architecture in place, one which ensures the protection of critical data across varied networks and environments, and technologies that dynamically respond to threats as they emerge,’ the KPMG in India report mentioned.

It is becoming clear that data ethics, privacy and security need to form an integral part of every organisation’s risk appetite and Board agendas to monitor progress.

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“This will require collaboration between entities that extract the data, and those responsible for ensuring that the data is used effectively and ethically,” the report said. (IANS)