Ponemon Institute’s 2007 Banking Privacy Trust Study

Ponemon Institute‘s 2007 Privacy Trust Study for Retail Banking has lots of interesting data points, but a few that stood out for me involved:

  • Importance of personal information privacy. 88% of consumers said that the privacy of their personal information is important or very important (4% didn’t comment).
  • Personal information safety perceptions. The percentage of consumers that believe that their bank makes their personal information safe or very safe declined from 40% in 2004 to 32% in 2007.
  • Privacy notices and policies. 45% of consumers did not read privacy notices sent by their bank — a number that has grown year over year since 2004. The percentage that don’t understand their bank’s policy about how personal data is used has remained consistent over the past four years at around 40%.
  • Factors that impact privacy trust perceptions. A bank’s overall reputation for customer service was the most frequently cited factor positively impacting a bank’s privacy trust score. On the flip side, the second most important factor negatively impacting perceptions was aggressive advertising and promotion tactics.

So let me get this straight. Consumers consider the privacy of their personal information important. No surprise. And over the past three years, fewer consumer think that their banks make their personal information safe.

Yet….almost half don’t read privacy notices, 40% don’t even understand their bank’s privacy policy, and more consumers base their perceptions of a bank’s ability to protect data on customer service reputation and marketing tactics than on specific policies (like restraints on sharing data) or technical approaches (like online security protocols).

If you’re an online banking executive, you’ve got a problem. What happens outside of your control — in the marketing and customer service departments — has a bigger impact on how your online customers perceive your bank’s ability to protect data than anything you do within your own group. Ouch.

The lesson learned: Banks that build trust with superior service benefit from a halo effect into their customers’ perceptions about other areas.

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