Zoom illustrates why Reputational Loss is more deadly than a Financial Loss

Amid the Coronavirus pandemic, Zoom had gained a lot of attention for being a ray of hope for those that wanted to stay connected to their workplace, colleagues, etc. while working from home. To put things into perspective, Zoom users jumped from 10 million users to 200 million users in three months! Despite this, Zoom failed to take the necessary precautionary measures to ensure its users were safe and secure at all times. Its growth has hardly been a smooth ride, with the company facing controversies, one after the other.

Zoom Controversies – A Quick Overview

At first, Zoom came under fire for sharing analytics with none other than Facebook via its iOS app. It was sharing data regardless of whether a user had a Facebook account or not. If that was not enough, it was later revealed that email addresses and photos were leaked as well. To make matters worse, Zoom was dealing with the issue of strangers joining calls without any hiccups, now referred to as “zoombombing”.

There is no denying the fact Zoom has responded to these issues promptly, but as soon as they sort one thing out, another issue arises. Recently, The Washington Post reported that Zoom recordings stored on the cloud were accessible and can be viewed by just about anyone, and it had to do with how the files were named.

While using a service like Zoom, one would expect that all conversations would be safe from third-parties. But that is not the case, as discussing confidential and personal information has proven to backfire on users.

Even though Zoom calls are not recorded automatically, hosts of a call do have the option to save video chats on their device, or even on Zoom’s servers.

Zoom’s Response to the Controversies

Seeing how Zoom’s security issues are growing, the company’s CEO and company founder Eric S. Yuan explained that these issues only arose because the company did not anticipate such high demand. As for the latest security issue, this is what the company had to say:

“Zoom notifies participants when a host chooses to record a meeting and provides a safe and secure way for hosts to store recordings. Zoom meetings are only recorded at the host’s choice either locally on the host’s machine or in the Zoom cloud. Should hosts later choose to upload their meeting recordings anywhere else, we urge them to use extreme caution and be transparent with meeting participants, giving careful consideration to whether the meeting contains sensitive information and to participants’ reasonable expectations.”

Also, the company founder and CEO assured users that they will be putting a hold on new features. The purpose of doing so is to give its engineers enough time to address any and all security concerns, like the ones mentioned above.

What can be learnt from Zoom?

Zoom has had a lot to deal with, and it does make sense for the company to be unprepared to deal with the sudden increase in demand. But that is still no excuse for such a company, or any other company that deals with user data for that matter, to have zero contingency plans for such situations that could negatively affect their reputation. Such companies need to understand that a financial loss is the least f their concerns, because a reputational loss is something very few are able to recover from. To illustrate how Zoom has suffered greatly due to the aforementioned controversies, here is a look at how its trend is taking a nosedive.

Users are well aware of Zoom’s security concerns, so much so, it is now being banned by several institutions, as can be seen by how Singapore has already stopped teachers from using the video conference service. If this continues, Zoom will have a major PR catastrophe to deal with. With failing user trust, their financials will take a hit as well, as is evident with the following graph.

Let this be a lesson for businesses that do not give internet security and privacy the attention they deserve. In this day and age, when security and privacy are of the utmost importance, companies simply can’t make do and get away with anything. Their actions and reactions to security and privacy concerns are vital for their success in the long run. Also, this is an equally important lesson for internet users to take their security and privacy seriously. They cannot jump aboard a bandwagon, expecting no repercussions because “other people are doing it”. They will need to take their own steps to safeguard their data online, no matter how minute it may be.

Be it companies or internet users, they should not under any circumstance ignore their privacy and security. Companies should invest more resources on security and privacy, instead of investing heavily on new features. Essentially, there needs to be a balance between the two. Additionally, they can also assign dedicated IPs to their employees, to prevent unauthorized access to their private networks. There are countless other strategies they can implement, and they will need to do so out of necessity to avoid a loss they will not be able to recover from.

Meanwhile, users will need to be smart about what they do online, what websites they visit, and the services they choose. They will also need to take additional steps like keeping themselves up-to-date about the latest happenings, ensuring their devices have the latest updates, using a VPN, and so on and so forth.