TalkTalk boss Dido Harding has come out fighting once more – despite revealing that profits halved at the telecoms company last year – by insisting that the firm has bounced back from its hack attack.
The business, which was forced to apologise after more than 100,000 customers had data stolen, saw pre-tax profits crash to £14m in the year to March, from £32m a year earlier. The final bill for the data breach could be up to £60m.
TalkTalk has recorded its highest-ever levels of customer loyalty as measured by churn, which affected only 1.3% of customers. However, 95,000 customers quit over the year, and observers have pointed out that many more could go as most are tied into deals and have not been willing to pay to leave.
In the 12 months to April, TalkTalk added just 4,000 customers to its phone and broadband service. Harding insisted: “Customer sentiment towards TalkTalk has recovered. Our learnings from, and experience since, the cyber attack have helped to focus our plans.”
Not everyone is convinced, however. Cameron Ross, director of payments strategy at UK payment security technology firm Eckoh, said: “What’s clear is that a porous approach to customer data, however unwittingly, can have an equally porous impact on profit and reputation.
“A 50% fall in profits underlines the existential importance of deploying iron-clad security technology. In the past, businesses have been able to rely on customer inertia, but those days are gone. Robust security is vital, as is having the systems to ensure that no unnecessary customer data is held, especially at a time when we are all digital nomads.”
He added: “If hackers blow a hole in the security of your customer data, your customers will blow a hole in your profits. Data security is a boardroom issue. If it’s not on the agenda, your risk management strategy is a colander.”
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