Proving PrivacyHaving a privacy policy is no longer enough. Consumers want verification that companies are actually following through on their promisesBy Kristin Valente Continued from Page 1 Unfortunately, no "silver bullet" will solve privacy trust issues. Some proponents champion technology as the solution to online privacy woes. Although technology can be part of the solution to ease a user's distrust, the effectiveness of any technology is primarily a function of how well it is implemented and maintained. Technologies that assist consumers in evaluating privacy policies still fail to address the root of the privacy trust issue: Consumers don't believe that companies are doing what they say they're doing. These technologies only automate a manual process that consumers distrust. Once overall compliance with stated polices is tested and assured, filtering may be appropriately used by consumers to only visit sites that maintain privacy polices and practices that meet their personal minimum criteria. And although technology features are available to assist consumers in managing the collection of data about them, very few are actually using the technology. For example, according to the Harris survey only 15 percent of consumers are regularly rejecting cookies when browsing or shopping online. So, what do consumers want companies to do to enhance their trust? Taking it to the next level by proving that the company does as it claims in its policies was the single greatest trust enhancer. In fact, 62 percent of consumers surveyed by Harris said they have greater confidence when a company proves it keeps privacy promises by having promises independently verified. Clearly if privacy issues are so prevalent and the challenges so great, businesses must weigh the cost of addressing these consumer trust issues with the return they expect from increased consumer confidence in their privacy practices. True, addressing privacy may minimize the costs associated with defending the company against privacy lawsuits and civil and criminal penalties for noncompliance with federal and state laws — which in the past year have cost businesses nearly $75 million in settlements. However, many companies are finding that investing in robust privacy protections can lead to a more positive return on investment through increased revenue and consumer participation, rather than just avoiding the risk of potential litigation. Independent VerificationConsumers are actively looking for evidence of a company's privacy infrastructure in an effort to discern whether it's doing as its policy promises. And consumers are becoming increasingly active in their efforts to protect themselves, exercising their rights to remove themselves from contact lists, using technology to filter out companies with practices they dislike, and simply asking more questions about privacy policy and practices. To be successful in building trust, independent verification must extend beyond the privacy policy itself to the business's actual practices. Consumers are most concerned that their data is protected from hackers and not shared with third parties without their express consent. The examination of privacy practices needs to provide consumers with the proof that the company is in fact doing as it says in its privacy policies. What do consumers want businesses to prove in order to earn their confidence?
The Bottom LineGiven the diversity of business models today and the prevalence of outsourcing, businesses must do more than manage the privacy practices within their own walls; they must also manage the chain of trust they create when sharing customer information with service providers as well as business and alliance partners. Any company that collects or uses consumers' or employees' personal information or acts as a custodian of this data in part of its business cycle needs to demonstrate good privacy and business practices. Companies that prove that they keep their privacy promises will earn the trust and confidence of consumers, and in turn, their business. Kristin Valente is a partner in the Innovative Solutions Group of Ernst & Young LLP's Assurance and Advisory Business Services Practice. She is responsible for the global acceleration of innovative assurance solutions that solve complex client needs such as Internet privacy and security, media measurement, regulatory and contractual compliance, and other business trust needs.
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