Banks' customer loyalty 'can be damaged after data loss'

2009-07-31

Banks' that experience data loss may have customer loyalty impacted as consumers may switch their accounts, according to research.

A survey carried out by Ipsos Mori for ArmstrongAdams has revealed that 26 per cent of respondents described as wealthy achievers were very likely to change banks because of personal customer data loss.

This may concern those firms looking to avoid a data breach as 60 per cent of those with moderate means said they would likely change banks if such an occurrence took place.

ArmstrongAdams director Tim Kipps pointed to the recent case which saw three HSBC firms fined by the Financial Services Authority (FSA) for not properly protecting customers' confidential data from being lost or stolen.

"To HSBC's credit, the firm has acknowledged responsibility and has invested substantially in new procedures and staff training as a result," he admitted.

"All organisations need to take data loss prevention very seriously," Mr Kipps added.

Earlier this month, HSBC Life UK was fined £1,610,000 by the FSA, while HSBC Actuaries and Consultants had to pay out £875,000.

HSBC Insurance Brokers Limited, meanwhile, was fined £700,000.

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