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TheStreet Open House

Canadian Companies At Risk Of Financial And Reputational Damage Resulting From Mismanaged Personal Information

Most firms are unable to adequately protect their customers against data breaches.

TORONTO, Nov. 23, 2012 /CNW/ - Recent studies indicate major discrepancies between the perception of privacy protection in Canada and the reality behind the ability of companies to protect personal information. A recent report from Advertising Standards Canada and MacLaren McCann indicates widespread willingness among Canadians to share personal information, with up to 79% exchanging their data to obtain a benefit. Trust in companies is increasing as up to 80% of Canadians believe their personal data is adequately protected. Unfortunately, the privacy landscape in Canada may suffer as a result of a false sense of privacy, according to a privacy professional and author of "Managing Personal Information: Insights on Corporate Risk and Opportunity for Privacy-Savvy Leaders" (Carswell, 2012).

The President and principal Risk Advisor of Toronto-based Informatica Corporation, Claudiu Popa says "we have been watching these studies come in and individually, they offer significant insight into the state of privacy but a cross-sectional analysis reveals a barometric predictor of the impact of personal information breaches over the short to medium term. The picture that emerges is anything but rosy. That's why we felt it was important to write this book" he added. According to the Edelman Privacy Risk Index, 62% of companies say their organization does not possess the expertise or technology to effectively protect personal information. The severity of these implications is underlined by a reported 15% annual increase in the number of companies that suffer from external privacy and security breaches (according to Ernst & Young).

While 73% of Canadians appear to show a surprising lack of concern over the information they submit online, they also indicate that they are aware that their Internet activities are tracked for marketing purposes. The majority are willing to share location data, shopping data and other information used for promotional purposes. The critical factor for Canadian companies is that 72 percent of respondents said they worry about the erosion of personal privacy even as they continue to share information online. In fact, the majority of Canadians do not want companies to share personal information with third parties and would prefer to have control over the shared data. The current study's findings independently support the book's perspectives as it offers solutions to prevent privacy breaches and their costly outcomes.

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