Cyber attacks’ affect more than your brand’s bank balance
When a cyber attack strikes, much more than finances are at stake. Overnight, a business can lose its reputation and the trust of its customers. Unlike stolen funds, these integral brand elements are not easily recovered. As the frequency and complexity of cyber attacks increase, so do the number of businesses whose brand equity is at risk.
Financial institutions are common targets for cyber criminals. As banks introduce more digital services, and more customers handle their finances online, the number of entry points for hackers increase. Last year, 9,000 Tesco Bank customers had £2.5 million stolen from their accounts in a coordinated attack. Tesco refunded the affected customers shortly after identifying the issue; however customer confidence had already been shaken. Following the attack, the bank’s BrandIndex score dropped 13.6 points, placing it last in a ranking of 31 competitors.
Brands outside of the finance industry are just as vulnerable. In fact, nearly half of all UK businesses suffered a security breach in the past 12 months.
In 2015, TalkTalk was hit by a cyber attack that compromised the personal information of over 150,000 customers. Following the breach, the brand hastily shifted its marketing strategy to focus on customer retention over acquisition. Despite their efforts, research conducted a year later found that it had lost 101,000 customers and its reputation trailed 6% behind the sector average.
Examples like these help illustrate the very real threat cyber attacks pose to brand equity. The financial implications of a breach are well documented, however in a world where ‘experience’ is increasingly the cornerstone of customer engagement, modern brands cannot afford to find themselves in situations like Tesco and TalkTalk. Robust IT infrastructure must be prioritised before an attack occurs in order to protect the most fragile element of every brand: the relationship it has with its customers.