Managing Informational Uncertainty in Customer Data Breaches

Recent research indicates that customers experience informational uncertainty following a data breach, a phenomenon that can result in adverse outcomes for companies, including diminished intentions to continue the business relationship. Informational uncertainty arises when customers lack clear information about the cause, scope, and personal consequences of a data breach. This dissertation sheds light on this emerging phenomenon and explores how to manage informational uncertainty from a risk management perspective, supported by one literature review and three empirical studies. The findings emphasize that informational uncertainty takes root before a customer data breach, offering companies an opportunity to prospectively influence customer perceptions. Furthermore, the research finds that customers experience reduced uncertainty when they perceive a degree of control over the data breach response process. The dissertation also explores the potential of collecting insights from affected customers, suggesting that such feedback can inform retrospective adjustments to manage informational uncertainty. These findings not only advance the understanding of customer data breach management but also highlight the nuanced interplay of informational uncertainty throughout different phases of a data breach.