Banks and financial insurers may still be seen as trustworthy by customers but the story from inside the industry is very different, a new study from Capgemini has shown.
The company conducted a global survey of 180 senior data privacy/security professionals and 7600 customers, which found that only 29% of institutions offer strong data privacy practices and a sound security strategy.
What's more, 21% of respondents were ‘highly confident' that they could detect a cybersecurity breach. From these alarmingly low statistics, Capgemini is now asking whether retail banks and insurers are safe when it comes to customer data.
On the other side of the counter, 83% of consumers trust their banks and insurers' data protection capabilities. One in four institutions have reported hackings, but only 3% of consumers believe their own provider has been breached.
The report says that 49% of institutions take between three months to one year to patch vulnerabilities. The more time it takes to patch vulnerabilities, the higher the risk of critical systems being compromised. This is because around half of all exploitation attempts by attackers occur within 10 to 100 days,” it adds.
Capgemini believes that organisations now have3 a clear incentive to improve their cybersecurity defences – all the more so when prohibitive fines and penalties that come with data breaches.
The majority of insurers are taking a passive approach to cybersecurity, as 43% could identify a board that actively participates in cybersecurity matters with an articulated cybersecurity vision and strategy. Conversely, 71% of banks could identify a board.
However, banks are also under the spotlight for their data protection habits: 78% retain data after a customer has left the relationship – 62% hold on to this data for as much as 10 years.
In addition, only 21% updated the data consent clause in the privacy policy during a policy refresh.
In India, 78% of consumers would switch banks in the event of a data breach, which means security is more important than ever.
Giving customers more control; communicating issues clearly and sooner; providing more value for data exchanges and educating customers about security issues are crucial to maintaining a healthy relationship.
Capgemini recommends that organisations:
- Align data practices with customer expectations
- Find innovative ways to provide non-intrusive security to customers
- Build required capabilities to monitor risks in real time
- Revisit the data governance model
“Building your reputation for data privacy and robust security is definitely challenging. But, those who strike the right chord with consumers will enjoy a competitive advantage over their peers and come out triumphant in the trust game,” the report concludes.