After a series of data breaches, the most famous of which was a hack of millions of Target Corp. (NYSE: TGT) customer accounts, it should not be a shock that only one in five Americans have “a lot of trust” in “businesses or companies they regularly interact with to keep their personal information secure,” according to a new Gallup poll. Only 22% say they have “a lot of trust.” The trend may threaten the future growth of businesses that get most of their revenue from online sales.
In specific, Gallup reports:
Consumers have more trust in the security of their information with some businesses or institutions than others. When asked how much they trust a list of nine institutions to keep their personal information secure, banks and credit card companies are the highest on the list, with 39% of consumers having a “lot of trust” in them. Following banks at a considerably lower level are health insurance companies (26%) and cellphone providers (19%). Given the rigorous data privacy provisions of HIPAA, Americans’ level of trust in insurance companies is surprising. Bringing up the rear are online retailers (6%) and social networking websites or applications (2%).
What is not clear is the effect this will have on companies like Amazon.com Inc. (NASDAQ: AMZN). Its sales soared 19% in the most recently reported quarter to $19.74 billion. Threats to that revenue include cyberattacks across the entire e-commerce industry in general, and more specifically the chance of a future hack of Amazon customer records. Amazon’s ability to take retail market share from the largest brick-and-mortar retailers, led by Wal-Mart Stores Inc. (NYSE: WMT), probably relies heavily on its position as a company that has had no had cybersecurity problems.
ALSO READ: America’s Most Profitable Products
Amazon’s problem is also a problem for the traditional retailers that need to transform themselves into ones that have a strong presence in e-commerce. Experts on the retail industry constantly press the point that companies, like Walmart that have flat same-store sales have little option for growth beyond their “dot-com” operations. While the success of these operations have been halting, an interruption of their progress would be extremely crippling.
Another hack like the one of Target’s accounts could cause consumers to draw back their e-commerce activity, and no retailer, whether it operates primarily online or is trying to push from traditional retail into online sales, can afford that.
ALSO READ: America’s Most Damaged Brands
Methodology: Results for this Gallup poll are based on telephone interviews conducted April 23 to 29, 2014, with a random sample of 1,011 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
The Average American Is Losing Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.
Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.
But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.