How breach of client confidentiality hurts customer service reputation

How breach of client confidentiality hurts customer service reputation

March 5, 2014

Client confidentiality is a principle that an institution upholds to ensure a company’s customers that no information about them would be given to a third party without their consent. In the customer service business, client confidentiality is very crucial because this type of work involves retrieving client information to assist customer support representatives in addressing the customer’s product-related issues.

Breaching this principle could lead to damaging consequences to both the customers and the company. On the client’s end, releasing information about them could lead to security threats. The business, on the other hand, could suffer massive losses in revenues, brand reputation, and consumer trust. These are the exact consequences that an India-based IT outsourcing firm suffered after it infringed the trust placed upon it by one of its key clients.

Here’s what happened


Some of the outsourcing firm’s employees shared a client’s confidential procedural document to an external entity. This prompted the client, an American insurance firm, to terminate the seven-year contract with its service vendor. Having generated 9.6% of the outsourcing company’s third quarter revenues for 2013, the insurer’s departure could lead to a $14-million loss from the outsourcing firm’s 2014 revenues.

The firm gets the majority of its profits from its healthcare information management unit, a type of service where client confidentiality should be held with high regard. This infringement happened at a time when various outsourcing industries around the world were strengthening their presence in the international healthcare market.

The incident thus raised questions anew about customer data security on the Internet, as well as doubts about foreign industries’ competency in the healthcare outsourcing field.

What we can learn from this

Breaching client confidentiality has effects not just on the company and the customers involved but also to the industry the company belongs and the market it caters. Thus, it is important for customer service firms to maintain client confidentiality because part of the overall definition of a satisfying customer experience is giving customers the assurance that any information they give is safe from intrusions and security threats.

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