Saturday, June 25, 2005

E-Commerce and Customer Confidence

The research firm Gartner conducted a survey of 5,000 people, which indicates that one out of three Internet users are buying less online. The reasons stated are the daily headlines reporting personal data being compromised, identity theft and the growing problem of phishing.

This survey indicates that 80 percent of the people surveyed have stopped opening e-mails from unknown sources. They are also using online banking services less frequently with 14 percent surveyed indicating that they no longer pay their bills online.

This lack of confidence could have a serious effect on the profitability of major corporations. Electronic bills cost about half of what a paper one does and a lot of marketing is conducted via e-mail campaigns. The time is now for the private sector to take notice and invest more in protecting the confidence of their customers. Quite often, as I have stated previously, the people doing these sort of crimes were not very sophisiticated and one might deduct that some of these corporations could have been more diligent in their security procedures.

This growing problem (if left unchecked) has the potential to create a negative effect on the economy. Daily, we hear calls for measures that will reduce civil liberties (such as national identity bills), but the reality is that the true problem is one of lax laws and not enough enforcement resources allocated to combat what has become an international problem.

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