Retailers with an annual turnover of $3 million or more will be required to comply with the Notifiable Data Breaches (NDB) scheme, with the government yesterday confirming legislation passed will take effect from February next year.
Under the NDB scheme, these organisations must notify individuals affected by a data breach which is likely to result in serious harm. The Australian Information Commissioner must also be notified.
In the context of retail for example, the disclosure of customers’ credit card details may be likely to result in serious financial harm. Notifying customers of this data breach provides them with the opportunity to take protective action, including cancelling credit cards.
Meanwhile, over one in five retail customers have encountered fraud directly in the past 12 months, while over 1 in 3 people or their loved ones have been affected, according to a new research report.
Experian’s Fraud Managament Insights report has found digital trust is relatively low across the Asia Pacific region with Australia scoring 3.8 and New Zealand 4.2 out of 10 in a survey.
The high levels of fraud, which the study anticipates will only increase as adoption of digital services increases, is having a negative effect on consumer trust.
Despite the retail sector in Australia and New Zealand having a relatively well-developed online retail market, regional digital adoption is the lowest in Australia.
Within the retail sector, 22 per cent of Australians had encountered fraud themselves at least once in the past 12 months and 14 per cent knew friends or family who had fallen victim to fraud within this timeframe.
About seven per cent admitted to encountering a fraud incident which induced substantial damages, while four per cent had friends or family who had.
Covering ten markets across APAC, the report surveyed 3,200 consumers and over 80 organisations from the financial services, telecommunications and retail sectors, each with revenues of at least US$10m.
The most common types of fraud involve online transactions where a credit card is not physically used, identity theft, and mobile payments or transactions.
“Trust is an essential currency for today’s digital world and is becoming ever more essential as digitalisation accelerates and changes the way we work, live and play,” said Ben Elliott, chief executive officer, Experian Asia Pacific.
“As governments across the region lay down plans to increase digitisation and enhance their economic outlooks through adopting new digital services, it is imperative that organisations ensure trust in their digital offerings are high, as consumers simply will not use services they do not trust.”
Elliott said the relatively low Digital Trust Index score of 3.2 out of 10 indicates that there is a divide between how businesses think they manage fraudulent digital transactions and the actual customer experience when fraud does occur.
The study revealed that while the companies surveyed indicated they are confident in their ability to combat fraud and provide a superior customer experience when fraud does occur, this did not translate to consumer perceptions.
According to Experian, countries like Singapore and Hong Kong, which would be expected to have a high trust score due to their advanced fraud management systems, lag due to a low tolerance for fraud and perceptions that companies are not managing the post-fraud experience well.
This low tolerance to fraud is mirrored in many advanced economies, with the highest acceptance of the fraud ironically in countries where fraud incidents are highest.
Retail, particularly e-commerce, tend to do better in this aspect, due to their focus on the post-fraud customer experience and them quickly addressing issues arising from fraud, the company stated.
“Ultimately, while digitalisation is set to usher us into a new era of convenience, more must be done to build greater customer trust in the digital world – lest all our efforts come to nought,” said Sandra Ng, Group vice president, Practice Group, IDC Asia/Pacific.
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