Edelman, the world’s largest public relations firm, has just released the Edelman Privacy Risk Index℠ (ePRI), a global study that helps businesses and organizations make sense of data security and privacy risks, enabling them to understand their impact on corporate reputation, and to better address customer concerns.
“The Edelman Privacy Risk Index findings shine a light on the worrying void between business’ privacy practices and consumer expectations about how their personal data is handled. From a communications and stakeholder engagement point of view, what is most concerning is the lack of clarity and transparency about these practices,” explained Pete Pedersen, global chair, Technology practice, Edelman.
The study was conducted by the Ponemon Institute, and surveyed 6,400 corporate privacy and security executives, from 29 countries around the world. The results revealed that most businesses are unprepared to meet customer and regulator expectations around privacy and data security:
- 57% of respondents believe that their organizations do not consider privacy and the protection of personal information to be a corporate priority;
- 62% say their organizations do not have the expertise, training or technology, to protect personal information;
- 55% complained about lack of adequate resources;
- 57% believe their companies are not transparent about what they do with employee and customer information;
- and 61% businesses are slow to respond to consumer and regulator complaints about privacy.
Things aren’t better regarding the potential risks related to data security and privacy incidents, where over 50% of the respondents are unaware that data breach could adversely impact their corporate reputation or financial position. The ePRI also shows that highly-regulated, consumer-facing industries such as financial services, health and pharmaceuticals, and communications present the highest levels of privacy risk.
Together with the study, to help businesses make better sense of potential risks caused by privacy-related problems and incidents, Edelman also released the Edelman Privacy Risk Index benchmarking tool, ePRI calculator, which provides a Privacy Risk Index score. The higher the score, the more likely for a company to suffer reputational damage or economic losses because of privacy-related issues.
For businesses willing to assimilate this kind of information even deeper, Edelman also released a free whitepaper (*.pdf), which details the finds of the study, demonstrating how privacy issues affect a company’s bottom line.
Earlier this year, Edelman conducted a related study on consumers, which demonstrates clearly why businesses should take privacy risks seriously. The study revealed that 85% of consumers around the world feel businesses need to take data security and privacy more seriously. For example, 8 out of 10 consumers would drop a banking institution’s services if their personal information is accessed without their permission; and 7 in 10 would leave a healthcare provider.