To some observers, privacy is fast becoming the leading casualty of the Information Age, a troubling side effect of technological progress that could impact the business strategy of those financial institutions that plan on participating in electronic commerce. And despite what may or may not be true in the on-going privacy debate, perception is reality-like it or not-in the court of public opinion.
For advocates of Internet commerce, it could be an uphill battle the whole way. Consider that the "eTRUST Internet Privacy Study" recently conducted by the Boston Consulting Group found that privacy of personal information on the Internet is a "consistent, significant concern" for consumers-so much so that it greatly limits their commercial Internet activity and impedes the growth of electronic commerce. Of the 9,000-plus consumers who responded to the on-line survey, more than 70 percent are more concerned about privacy on the Internet than they are about information transmitted by telephone or mail (ironically, that's where all this information arbitrage began).
It gets weirder. These consumers are so freaked out by the perceived invasion of privacy that their "mistrust" often leads them to either refuse to provide information on the Internet (okay, this is normal operating procedure for those people suffering from the Big Brother syndrome) or- believe it or not-to give inaccurate information. An astounding 27 percent of survey respondents admit to providing false personal information on Web site registration forms. And this is only the beginning; you can only imagine the profound impact of widespread biometric identification on these people.
The bottom line: The Boston Consulting Group estimates that about $6 billion in additional electronic commerce could be realized by 2000-if consumer privacy issues are addressed.
But the news is not all bad. The study findings also indicate that consumers are more willing to reveal personal and financial information to companies that provide disclosure of information-gathering and dissemination policies.
Advocates of the Internet such as cypherpunk Ian Goldberg believe that the challenge amounts to "privacy through technology, not legislation." But Andre Bacard, author of Computer Privacy Handbook, contends that the Information Age's dark side reads more like the Surveillance Age. Let's hope not; $6 billion isn't exactly pocket change.