MUMBAI: As a large part of our day and indeed our lives moves online, brands are responding by relying more and more on digital technologies to deliver a unique experience to their customers. It is no longer a purely “real” world that we interact with, it is a mix of physical and digital experiences. And new tech like AI and AR (augmented reality) are only blurring those lines more. For brands, these shifts imply the need to re-evaluate even ‘hygiene’ aspects of their experience, like cybersecurity.
But what are the long-term and comprehensive implications of this shift- both for the consumers as well as the brands? A study conducted jointly by Infosys and brand consultancy firm Interbrand on cybersecurity and brand value impact attempts to shed light on some of these concerns. This has two implications: for consumers, it implies a quid pro quo – sharing personal information with brands for a personalised experience. For brands, it means the real and virtual have to coexist in creating this unique experience.
This is no longer just true for digital or tech brands like Google and Amazon, but also brands that were focused on offline. For instance, it is estimated that the amount of data shared online at the beginning of 2020 was a staggering 44 zetabytes.
The companies jointly released on Tuesday a report that examines the long-term impact of data breaches on value of the world's top brands across sectors, called ‘Invisible Tech. Real Impact’. The report reveals the world’s 100 most valuable brands could face a staggering potential risk to the tune of $223 billion due to a data breach. The report did not name the top 100 brands.
To quantify this risk, Infosys and Interbrand identified the brand factors most impacted when a company suffers a data breach – presence, affinity, and trust – and simulated the results using Interbrand’s proprietary brand valuation methodology. They found that technology, automobile and financial services industries might suffer a higher overall brand value at risk, whereas luxury brands and consumer goods face greater value at risk as a percentage of their net income.
Specifically, of the total possible value erosion, technology brands could lose the most - up to $29 billion brand value risk, followed by consumer goods up to $5 billion in brand value risk, automotive up to $4.2 billion, financial services up to $2.6 billion, and luxury goods up to $2.4 billion.
For a full copy of the report, please click HERE
[Embed : https://www.infosys.com/services/cyber-security/insights/long-term-cost-data.html]
Interbrand India’s chief growth officer Ameya Kapnadak said the study evaluated parameters like financial value of the company, role and strength of the brand. “At the most basic level, a data breach instantly creates negative news about the brand, which can create a negative perception in social media and impact presence. In fact, we believe that the presence score is dented for every brand regardless of whether it is digital or physical,” he added.
The second significant impact that a breach has is on affinity. In case of a breach, customers might either stop engaging with the brand or reduce engagement. The report said as much as 85 per cent of customers would not deal with a brand after a data breach, while 65 per cent customers would lose their trust in the brand in the event of a data breach.
In Interbrand’s estimate, a breach might impact affinity scores between 0.5 points and 2 points, depending on the extent to which consumers engage with them digitally. The most significant impact of a breach, however, is on trust, which is at the heart of any strong relationship.
The report said that, traditionally, banks that handle large amounts of customer wealth may see up to 16-17 per cent of their brand value at risk. Tech brands also have nine to 12 per cent of their brand value at risk. This, in many ways, represents the ubiquity of these brands in everyday lives, with customers willingly sharing vast amounts of personal data with them, said the study.
Cybersecurity has been a hot topic of discussion, especially in the current times that we live in. Indeed, what was once an arcane subject that only the most seasoned of IT professionals would understand, has now spilled over into the lexicon of laypeople as well.
“The issue of cyber security is real and important. To quantify (this) financially was difficult. This report talks about that and also how other business segments should embrace security. We need to bring deeper commitment to this conversation,” said Infosys chief information security officer & head cyber security practice Vishal Salvi.
