The almost daily assault of headlines reporting data breaches is taking a toll on e-commerce.
According to research firm Gartner, one out of three Internet users is buying less online because of security concerns related to data breaches, identity theft and phishing (define) attacks.
In the Gartner survey of 5,000 U.S, adults, nearly twice as many consumers said they worry more about thieves getting undetected access to private credit reports and other sensitive financial data than defending against phishing attacks.
"Companies need to take steps quickly to beef up online security," Avivah Litan, vice president and research director at Gartner.
"We are seeing unprecedented levels in consumer transactions online. Yet businesses cannot rely on the Internet to lower costs and improve marketing efforts indefinitely if consumer trust continues to decline."
According to Gartner, more than 80 percent of U.S. online consumers say their concerns about online attacks have affected their trust in e-mail from unknown sources. Of these consumers, more than 85 percent delete suspect e-mail without opening it.
"This figure has serious implications for banks and other companies that want to use the e-mail channel to communicate more cost-effectively with their customer base," Litan said. "For example, a bill sent electronically costs about half of what a bill costs when sent through regular mail."
The parade of bad news is also taking a whack out of online banking. An estimated 73 percent of the Gartner respondents regularly log on to banking accounts and 63 percent pay bills online.
"While online banking customers continue to access bank accounts over the Internet, they are changing their usage patterns," Litan said. "Nearly 30 percent of the online bankers say that online attacks have influenced their online banking activities. Over three-quarters of this group log in less frequently and nearly 14 percent of them have stopped paying bills via online banking."
Despite the recent focus on data breaches, phishing attacks are not slowing down, according to Gartner. More than 40 percent of the adults who received phishing attack e-mails received them in the two weeks preceding the survey. Another 23 percent of respondents said they received phishing e-mails two weeks before that.
"In general, consumers expect companies they do business with to provide secure online communications and to protect consumer data from thieves at no additional cost to consumers," Litan said. "They want guarantees authentication from merchants and other businesses that their Web sites are genuine. Consumers want this reaffirmed every time they go online."
Adapted from internetnews.com.
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