Protect Data & Build Trust With Customers

KPM Fraud Update link to blog.

02 Mar Protect Data & Build Trust With Customers

Every time your business interacts with customers is an opportunity to build trust, and it is an opportunity you cannot afford to neglect. Look at customer data. When customers disclose personal and financial data to your company, they expect you to do everything in your power to protect it from hackers — as well as non-criminal third parties. And if you do not, just look at some of the companies affected by major data breaches.

Provide fraud notices

Unless you run a cash-only business, you collect financial data from you customers every time you process transactions. If you offer credit accounts to business customers, you probably collect even more information. You are obliged to ensure this data does not fall into the hands of thieves and fraud perpetrators.

Consumers do not need to understand the inner workings of your fraud prevention efforts. However, they must trust that you have an effective program in place. Provide notices on your website and train customer service representatives to answer questions about your fraud prevention program. If you require customers to use passwords or answer questions to prove their identities online, explain why these steps are necessary.

Explain how you share data

Criminal activity is not the only thing customers worry about. Increasingly, they want to know how businesses willingly share — and often profit from — their data. Given the patchwork of data privacy regulations, most consumers know little about the laws and regulations governing businesses. In layman’s terms, briefly summarize which ones cover your company’s activities, as well as your commitment to honoring the spirit and intent of them. Note that if you have customers in the European Union (EU) (potentially any company with a website), you need to comply with the EU’s stringent data protection laws.

As a general best practice, do not collect any more data from customers than you absolutely need. If you intend to share it with third parties, inform customers at the time you request the data and allow them to opt out, if possible. Keep in mind that some customers will probably go elsewhere if they know you plan to share their data or if your business model is largely based on sharing data. Nevertheless, transparency is critical.

All about communication

Whether you are trying to prevent fraud or share data with third parties responsibly, keep your customers informed. Good interpersonal relationships are based on trust and that is just as true for business relationships.