Recognizing e-businesses’ concerns about privacy and security, professional services firm Ernst & Young has launched the Center for Trust Online (CTO) to foster trust and confidence in electronic commerce.
Ernst & Young contracted Technometrica, Inc. to conduct a consumer trust survey of 966 adults and 51 randomly-selected Fortune 500 companies. The results indicate that although one in every two Internet users over the age of 18 made a purchase online, major trust barriers still exist.
“Privacy, security, reliability and the ability to fulfill orders promptly online are just a few of the issues that impact consumer trust on the Net,” said Carolyn Buck Luce, director of Electronic Business for Assurance and Advisory Business Services at Ernst & Young. “With the CTO we hope to build consensus within the business community and break down the barriers that currently discourage transactions online.”
Building consensus may be easier said than done, according to the results of the Technometrica, Inc. survey. Results showed 66 percent of those who have not made a purchase online are unlikely to do so in the near future because they still believe that the Internet is a risky environment for transactions.
Additionally, 63 percent of all Internet users are still uncomfortable providing credit card numbers online, and 49 percent are uncomfortable providing personal information.
Not surprisingly, 95 percent of executives polled believe that security is a very important factor in achieving e-commerce success.
If the CTO has one mission that may alleviate some of these concerns, it is to educate consumers about the myths and misconceptions associated with online commerce. One such example is the $50 (US$) liability limit for most victims of credit card fraud.
Ernst & Young is referring to its new venture as a “virtual trust community,” and in that community spirit is inviting companies to start collaborating online through its Web site. Plans call for online events, forums and chat rooms to address online business experiences, as well as global trust issues such as privacy and security regulations, industry standardization, and responsible handling of consumer information.
CTO’s debut appears to be timely because of the onslaught of new e-businesses that are racing to beat their competitors into the new frontier of e-commerce. Forecasts from Forrester Research, Inc. predict that business-to-business transactions could grow to $1.3 trillion over the next four years, up from $43 billion in 1998.
Most businesses are seeing the cost-saving benefits of doing business on the Internet, as much as they are seeing the potential of increased revenues. A study from Giga Information Group released in August predicted that corporations around the world will save up to $1.25 trillion by doing business over the Internet by 2002.
Still, until consumers get past their fears of online transactions, companies will likely have a hard time realizing maximum cost savings or profits. The trust issue roadblock is significant, particularly in view of current research which suggests that most businesses will be doing at least some transactions online soon.
Ernst and Young’s own research, their 18th Annual Survey of Retail Information Technology, reveals that 74 percent of IT executives surveyed say their top priority over the next 12 months is implementing better solutions for collecting and using key customer and operational data.
Within the $5 billion-plus companies, 100 percent of IT execs named this issue as the top priority.
While CTO has the credible backing of Ernst and Young’s name, it is not an original concept. Trusted information collaboration and exchange online is being established as a viable stand-alone business model, as well as an adjunct to many on and offline business models.
DealSpace, a service offered by IntraLinks, which provides a secure environment for strategic transactions, is a leading example.