While the importance of customer privacy to brand image is increasing, most companies are finding that their allocated resources are falling short of those needed to meet corporate and regulatory requirements.
A recent study from the Ponemon Institute and Vontu, the 2005 Benchmark Study of Corporate Privacy Practices, reveals that the importance of protecting customer, patient, and employee privacy to maintain a positive brand image has increased dramatically among executives in all industries.
However, most companies indicate that budgets for protecting customer privacy are still catching up with the urgency created by recent customer data privacy breaches that have received wide publicity and could have negatively affected brands and bottom lines.
Just two years ago only 36% of companies believed that safeguarding privacy was important to brand image. The Ponemon survey reveals that customer and employee privacy have both increased significantly in importance.
Other key findings include:
- 56% of respondents believe that safeguarding privacy has a direct positive impact on their company's brand or image in the marketplace; a 55% growth rate from 2003 results.
- 80% have a privacy or data protection strategy.
Company budgets and business processes are still catching up to increased focus on customer privacy:
- Only 38% believe their resources are adequate to manage privacy requirements across the enterprise
- Only 31% have a formalised notification process in the event of a privacy crisis, although privacy notification laws such as CA 1386 have been enforceable for more than a year.
Top security initiative
The adoption curve of customer data privacy policies and technologies should continue to accelerate with executive recognition that data privacy issues are tied not only to information security but also brand image, consumer confidence, and subject to increasing government regulations.
According to Larry Poneman of the Poneman Institute: "In today's corporate environment, customer and employee privacy have become a top security initiative for many Fortune 500 corporations. We've seen a strong correlation of customer privacy to company brand in multiple studies. All our findings indicate that companies which demonstrate and communicate a strong commitment to the protection of personal information have realised an increase in customer confidence and loyalty to their brand. No doubt more companies will invest in technologies to protect customer privacy."
For more information or to download the full study, visit Vontu's web site.