Nameless in Cyberspace: Protecting Online Privacy: Online Commerce Was Predicted to Become a Key Feature of the Payments System but Privacy Concerns Have Stymied Its Growth. Con Yianakos Outlines How the Financial Services Industry Can Play a Part in Restoring Confidence. (E-Commerce)

By Yianakos, Con | Journal of Banking and Financial Services, December 2002 | Go to article overview

Nameless in Cyberspace: Protecting Online Privacy: Online Commerce Was Predicted to Become a Key Feature of the Payments System but Privacy Concerns Have Stymied Its Growth. Con Yianakos Outlines How the Financial Services Industry Can Play a Part in Restoring Confidence. (E-Commerce)


Yianakos, Con, Journal of Banking and Financial Services


When shopping in the `real' world, there's generally little conflict between the need for the customer to disclose some information and his or her right to--and expectation of--privacy.

But take out your credit card in the virtual world and the consequences can be quite scary, not just because of online card fraud but the loss of privacy and--in some cases--theft of an individual's identity.

Traditional shoppers don't exactly wear a big sign with their address emblazoned on it. Compare this to the virtual world, where even if you're just `window' shopping, many websites require you to register or accept a `cookie', information that a website puts on your hard disk so that it can track your internet travels.

The end result is that consumers are wary of the internet. They know that a phone number or email address, given for `questions about your order' for instance, can quickly turn into dinner time sales pitches or junk emails flooding their inboxes.

Not surprisingly, few people want such impositions. Some online shoppers have even resorted to giving bogus identities and other requested information such as income levels: Albert Einstein with an income of $5 and an email address of e=mc2, for instance!

What are customers really saying when they do that? They're stressing they don't trust the security of the site, and they don't trust that the owner of the site is going to respect their privacy and refrain from abusing or selling their personal data.

According to the analyst house Harris Interactive, 70 per cent of consumers worry their online transactions aren't secure and 75 per cent are concerned companies will share their personal information with others. According to other consumer research, these fears reduced US online purchasing by $US15 billion last year.

Furthermore, it has been estimated that electronic commerce would double if people had greater confidence that their privacy was protected on the web. In fact, the lack of confidence in privacy outpaces ALL other concerns--including price and ease of use--in deterring people from buying over the internet.

That's a huge wasted opportunity--and a very clear message that businesses have some serious work to do to turn these percentages around.

While the privacy issues are serious enough today, they're nothing compared with future implications if the expected internet usage trends materialise. Imagine, for instance, the implications for individual privacy in a world in which millions of people drive internet-enabled cars that can have their movements monitored at all times.

Or what happens to privacy for millions of people with internet-enabled pacemakers? Who has access to real-time data on their heartbeat, blood pressure and cholesterol levels? Their doctor or insurance company?

The solution lies with a responsible marketplace. Through business policies and practices, the banking and financial services industry has to send an unambiguous message that it can be trusted and respected. People must be reassured that they will know in advance how any information will be used.

Under Australia's new privacy rules, customers have the right to request that their financial institution not bother them with unwanted sales advances. …

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Nameless in Cyberspace: Protecting Online Privacy: Online Commerce Was Predicted to Become a Key Feature of the Payments System but Privacy Concerns Have Stymied Its Growth. Con Yianakos Outlines How the Financial Services Industry Can Play a Part in Restoring Confidence. (E-Commerce)
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