IoT
IoT
Business & Finance
News
4/5/2005
04:46 PM
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Privacy Pays For Banks

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.

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.

"Having a privacy problem will have a catastrophic effect," Weider says. "Not only will you lose a lot of customers, but they'll be your best customers."

Asked what steps banks should take to earn customer trust, survey respondents wanted information sharing with third parties to be limited, fewer marketing pitches, and identity verification when conducting online transactions.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of September 25, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.