The numbers released in the Federal Trade Commission's recent study of on-line privacy, reported in the June 5 American Banker ("FTC Finds On-Line Privacy Wanting-Even at Bank Sites," page 3), obscure a more positive story.
It was reported that only 16% of financial companies disclose their practices concerning privacy of customer information. Bankers are included in that percentage. But they were absorbed within a sample of 125 financial sites out of 1,400 commercial sites in the study.
The 125 financial sites included credit unions, mortgage companies, real estate agencies, securities brokerages, investment and asset management firms, venture capital firms, investment counselors, stock exchanges, student loan services, investment newsletters-and banks.
The banks represented on the board of directors of the Banking Industry Technology Secretariat, a division of the Bankers Roundtable, are 100% in compliance. Each has posted disclosure of its privacy practices; each has endorsed a set of privacy principles agreed to in common by major associations of the banking industry; and each is implementing a privacy plan.
The BITS board banks hold 45% of the banking assets in the United States. The 90 members of the Bankers Roundtable collectively hold 80% of the assets of the banking industry. Currently, 60% of those assets are in banks that have posted privacy principles on-line. The Roundtable is working toward 100% compliance.
As Edward Crutchfield, chief executive officer of First Union Corp. and chairman of the BITS board, stated recently: "Banks are the historic providers of safe and secure financial services. The banking industry is moving aggressively to ensure that the traditional safeguards of privacy, security, and effective risk management are in place to protect the public in the new environment of electronic commerce."
These numbers help to demonstrate that commitment.
Senior vice president,Chase Manhattan Bank