Wednesday, April 06, 2005

Privacy Pays For Banks

From Security Pipeline, via Wagner's Weblog, a Ponemon study has some interesting things to say about the importance of customer trust. Most interesting is that 57% of customers would stop using online banking in the event of a single privay breach.
Security Pipeline | Privacy Pays For Banks:

"A study released today finds that trusting customers are the most profitable for banks, but only if customer privacy is respected.

'In the past, online banking was all about who had the best features and functions,' says Mike Weider, founder and CTO at risk-management solutions company Watchfire Inc. 'Now, issues of trust, privacy, and security are more and more a differentiator between the leaders and the laggards.'

According to the 2005 Privacy Trust Survey for Online Banking, customers with a high degree of trust in their bank are more likely to use online financial services, which generate more profit for banks than offline transactions. The study, sponsored by Watchfire and conducted by the Ponemon Institute, a management-practices research organization, also finds that trusting customers are loyal, with 55% claiming they've never visited another bank's Web site.

The price of that loyalty is an expectation of privacy. Among those with a high level of trust in their bank, 57% indicated that they would stop using online services in the event of a single privacy breach. More than 82% of respondents cited identity theft as their biggest concern should a privacy breach occur. "

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