Quick Take: Mistakes Banks Make About Privacy - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Feature
News
7/11/2003
10:18 AM
50%
50%

Quick Take: Mistakes Banks Make About Privacy

Financial-services companies face two standards when dealing with privacy issues: giving customers the level of privacy they want and giving them the type of privacy the government demands. But spending more time on customer desires can go a long way toward meeting compliance standards, says Dennis Behrman, an analyst at Financial Insights, which advises financial-services companies on technology issues. The Gramm-Leach-Bliley Act, being closely followed by the Health Insurance Portability and Accountability Act, has provided a highly visible example of regulated privacy. Behrman says many financial-services companies make similar errors in handling customer privacy, and their experience can help companies in other industries as they consider how to deal with privacy issues, whether or not they're regulated by law. The mistakes include:

• Assuming customers want to opt in or opt out. Many customers would prefer a choice in between giving the company carte blanche to share personal data and a blanket no. They'd prefer something more like a menu of privacy policies, just as they get a menu of services.

• Using convoluted and complicated language for privacy policies. Boilerplate statements meet legal standards. But they create customer confusion and suspicion.

• Looking at privacy as a database problem, instead of exploring the use of rules-based middleware engines and governance systems.

• Missing the chance to use privacy regulations as an opportunity to clean up customer data to deliver a broader business benefit. Behrman estimates 50%--and perhaps as much as 80%--of data captured on customers at a typical financial-services firm is never used.

Though Gramm-Leach-Bliley compliance first hit consumers in a big way with the often-confusing opt-out letters they received from banks and insurance companies, compliance issues haven't gone away. Behrman predicts spending on Gramm-Leach-Bliley compliance will rise from $50 million this year to $170 million in 2006. So there's still plenty of incentive to get privacy policies right.

Return to: Tech Guide: Privacy: Keeping Regulators Happy

Illustration by Doug Ross

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2021 State of ITOps and SecOps Report
2021 State of ITOps and SecOps Report
This new report from InformationWeek explores what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

News
How CIO Roles Will Change: The Future of Work
Jessica Davis, Senior Editor, Enterprise Apps,  7/1/2021
Commentary
A Strategy to Aid Underserved Communities and Fill Tech Jobs
Joao-Pierre S. Ruth, Senior Writer,  7/9/2021
Slideshows
10 Ways AI and ML Are Evolving
Lisa Morgan, Freelance Writer,  6/28/2021
Register for InformationWeek Newsletters
Video
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
White Papers
Slideshows
Twitter Feed
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.
Sponsored Video
Flash Poll