According to a new report, half of UK adults would cancel their contracts with telecoms and broadband providers if a personal data leak were to take place at their communications service provider (CSP) and would even be willing to pay a termination fee to do so.
Consultants at the professional service company KPMG compiled the report, which found that security breaches are now the greatest threat to customer loyalty. Previously CSPs were more concerned with poor customer service as the motivating factor behind customers cancelling their contracts but in a more connected world a security breach could have a long-lasting effect on consumers that do not want to be burdened with unnecessary complications and the risk of having their identities stolen online.
The report found that a security breach was twice as likely to prompt customers to switch providers and that poor customer service is not the threat it once was. The security breach that TalkTalk dealt with in 2015 for example, highlighted how the mindset of customers has changed greatly concerning such leaks in recent years.
KPMG has suggested that CSPs should make more of an effort to show customers that they are trustworthy going forward in order quell their fears of such a breach happening to them. However, investments in the quality of their service and the reliability of their networks should not be overshadowed by projecting a trustworthy image to consumers.
Alex Holt, KPMG's UK head of telecoms, media and technology, explained how companies could benefit from such a move, saying: “By focusing on building trust with their customers, there is a clear opportunity for telcos to increase revenues and become the trusted gateway for tomorrow's connected consumer.”
Holt also noted that telecoms should also work on building up a reliable network to satisfy customer's needs for constant connectivity, saying: “Consumers love their connected lives, so their tolerance is extremely low for anything that prevents connections with the devices or services they want. Before telcos can get a license to up- and cross-sell, they've got to get the basics right and deliver a great connected experience.”
BT's recent outage is an excellent example of how quickly consumer backlash can occur when users are unable to access the sites and services they depend on daily. However, potentially having one's personal information leaked online will always be significantly worse than not being able to get online for a few hours.
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