Privacy Issues in the Banking Industry
Introduction
With the improvement of technology continuously growing every day, privacy has become one of the most important issues in today’s society. Privacy refers to one’s right to control how your personal information is collected and used by financial institutions. It is the financial institution’s responsibility to provide security to your personal information. Security refers to the obligation of the company that collects and uses your information to ensure that your information is safe against unauthorized uses (Privacy Rights Clearinghouse). For the banking industry, identity theft is a growing concern for customer privacy. Identity theft can occur anywhere including the internet. The technology of online banking is constantly growing and is being recognized globally. Online banking is very important for banks because it is a helpful tool used to provide better customer service and enhance efficiency on the bank’s end. According to a study conducted by HSBC Direct, nearly half of American internet users manage their bank accounts online. Furthermore, “The study revealed 62% of users aged 21 to 34 conduct most of their banking through the Internet. Among the customers aged 45 to 69 40% use their online banking accounts actively” (Ecommerce Journal). Internet identity theft can pose a major risk to the bank’s privacy protection through its online banking system. The question is, what can banks do to help customers lower their risks of having their identities stolen while maintaining their financial information private?
Identity Theft
Identity theft is a crime that occurs when a criminal acquires a piece of the victim’s information to commit fraud without the victim’s knowledge. It is the most common type of credit/debit card fraud (Byron Bank). Based on the FTC 2006 Identity Theft Survey Report, the majority of victims do not know how their information was stolen. According to the FDIC, banks share their customer’s information to help
With the improvement of technology continuously growing every day, privacy has become one of the most important issues in today’s society. Privacy refers to one’s right to control how your personal information is collected and used by financial institutions. It is the financial institution’s responsibility to provide security to your personal information. Security refers to the obligation of the company that collects and uses your information to ensure that your information is safe against unauthorized uses (Privacy Rights Clearinghouse). For the banking industry, identity theft is a growing concern for customer privacy. Identity theft can occur anywhere including the internet. The technology of online banking is constantly growing and is being recognized globally. Online banking is very important for banks because it is a helpful tool used to provide better customer service and enhance efficiency on the bank’s end. According to a study conducted by HSBC Direct, nearly half of American internet users manage their bank accounts online. Furthermore, “The study revealed 62% of users aged 21 to 34 conduct most of their banking through the Internet. Among the customers aged 45 to 69 40% use their online banking accounts actively” (Ecommerce Journal). Internet identity theft can pose a major risk to the bank’s privacy protection through its online banking system. The question is, what can banks do to help customers lower their risks of having their identities stolen while maintaining their financial information private?
Identity Theft
Identity theft is a crime that occurs when a criminal acquires a piece of the victim’s information to commit fraud without the victim’s knowledge. It is the most common type of credit/debit card fraud (Byron Bank). Based on the FTC 2006 Identity Theft Survey Report, the majority of victims do not know how their information was stolen. According to the FDIC, banks share their customer’s information to help
References: Federal Deposit Insurance Corporation. (2007). Safe Internet Banking – Protect Your Privacy. Retrieved from: http://www.fdic.gov/bank/individual/online/protect.html Federal Trade Commission Privacy Rights Clearinghouse. (2007). Financial Privacy FAQ. Retrieved from: http://www.privacyrights.org/fs/fs24d-FinancialFAQ.htm Privacy Rights Clearinghouse Privacy Rights Clearinghouse. (2004). Is Your Financial Information Safe? Retrieved from: http://www.privacyrights.org/fs/fs24e-FinInfo.htm Privacy Rights Clearinghouse Synovate. (2007). Federal Trade Commission – 2006 Identity Theft Survey Report. Retrieved from: http://www.ftc.gov/os/2007/11/SynovateFinalReportIDTheft2006.pdf