A new study has found concern over online shopping by Irish consumers is costing business up to €250 million a year, writes Dominic Coyle.
Concern over identity theft is dissuading a significant number of Irish consumers from shopping online, according to a new study by research group Behaviour & Attitudes, and could be costing business as much as €250 million every year.
Around 750,000 people - more than half of the 1.4 million people who have access to the internet at home or at work - say they are concerned about identity theft when doing business online, with online retailers and internet service providers viewed as the least trusted areas of the online business community.
Software group CA, formerly known as Computer Associates, says the results reveal a high level of awareness and concern over online identity theft in Ireland, which is seriously impacting on the number of people who are prepared to do business online.
The Behaviour & Attitudes data indicate that 350,000 internet users don't shop online.
More than a third of those cite their lack of trust in online business dealings.
CA says the survey is a wake-up call to retail and other online service providers that they are not doing enough to address public security concerns about the use of credit card and other private information online.
Only 17 per cent of Irish internet users believe the companies and banks with which they do business online are doing enough at present to protect them from identity theft.
"Ultimately, Irish businesses need to be seen to take greater levels of care of consumers' personal details, such as passwords and credit card details," says Sean O'Connell, IT security consultant at CA Ireland. "People are aware that unscrupulous online criminals are seeking to compromise their information. Companies need to increase layers of security and precautions and invest in better technology, better processes and ongoing staff training."
Three-quarters of respondents were aware of the issue of identity theft, with word-of-mouth the most common source. As many as 15,000 Irish people have had their identity compromised online, according to the data.Nearly a quarter of those who do business online say they have, on occasion, chosen not to complete a transaction, and almost 10 per cent of all online transactions are not completed because of concerns about individual companies and websites.
Medical institutions and banks are seen as the most trustworthy websites in terms of protecting the personal details of their customers, followed by government and credit card companies.
"We estimate that over €1 billion is spent annually by Irish adults on internet transactions," says O'Connell, "and we know from this survey that about 1,150,000 Irish people do business on the internet, which means the average spend is around €1,000 a year.
"Given this and the fact that we know that 10 per cent of all internet transactions are aborted due to these concerns, we can conclude that around €250 million in revenue is lost to internet business each year because of Irish consumer fears about the security of their personal information online."
He said Irish companies appeared content to "hide behind a cloak of 'security through obscurity'," which made little sense. "If consumers don't feel that they're being adequately protected, they will choose to do business elsewhere."
Online retailers needed to be seen to be proactive in their protection of consumer data, O'Connell said. "If attacks do occur, companies must be able to communicate quickly and concisely with their customers to enable them to limit potential losses. This will help to reduce the effect on consumer confidence, limits the business's potential legal liability and reduce the damage to its trading ability," he added.
The survey, carried out in May, quizzed 1,200 adults across the State, 41 per cent of whom use the internet.
