Customers won't tolerate security breaches

Latest research shows that firms who fall victim to hacking, viruses or phishing may have to worry about more than just patching up their systems

A survey, which was carried out by telecoms firm Energis, found the rate of customer attrition in the business-to-business sector rose by 47 per cent after a firm fell victim to hacking, a virus, a denial of service attack or a phishing fraud.

Energis spoke to more than 100 large companies or government agencies, and found nearly all of them had suffered a security breach in the last year. These organisations reported many of their existing customers had taken their business elsewhere because of these breaches and the customers that remained were spending on average four per cent less with them.

Energis also found in the cut-throat world of UK business, rival firms are often citing these security breach as a reason for changing suppliers.

Malcolm Seagrave, security expert at Energis, said: "Companies can't replace this kind of revenue easily. The cost of losing customers far outweighs the cost of putting their systems right".

Hacking attacks and viruses can force a company's systems out of action for hours or even days, seriously eroding confidence and making it impossible for customers to access the company's web-based services. Many who fail to access a site subsequent look elsewhere, never to return.

Graeme Wearden writes for ZDNet UK