The Challenges of Online Trust For online and offline business Alex - PowerPoint PPT Presentation

The Challenges of Online Trust For online and offline business Alex Todd, President, Trust Enabling Strategies McMaster World Congress 2005 1

Why do we still not trust the Internet? 2

Internet Trends 200 175 Users Growth Usage 150 E-commerce Trust 125 100 2001 2002 2003 2004 Year 3

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Negotiation & Order Discovery Product fit ! Identity ! Negotiation criteria ! Value of goods/services ! Cultural issues ! Vendor reliability ! Quality assurance ! Rules of engagement ! Viability of seller ! Credit worthiness ! Applicable exchange rate ! Authorization to commit ! Order placement and ! verification Settlement & Compliance Fulfillment Governing laws Customer services ! ! Agreement Shipper reliability ! ! Payment method Transfer of responsibility ! ! Non-compliance protection Quality control ! ! Disputes Applicable standards ! ! Recourse Tariffs & customs ! ! Transaction reversal ! Privacy considerations 5

How do some online businesses manage to inspire so much confidence with consumers? 6

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eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 8

eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 1. Authoritative Sources ID Verify from Equifax ! Product Opinions & Grading ! Product Appraisals ! Privacy Policy ! TRUSTe seal ! 9

eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 2. Experiential Sources Feedback Forum ! Tradenable escrow ! Product authentication ! 1. Authoritative Sources ID Verify from Equifax ! Product Opinions & Grading ! Product Appraisals ! Privacy Policy ! TRUSTe seal ! 10

eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 2. Experiential Sources Feedback Forum ! Tradenable escrow ! Product authentication ! 1. Authoritative Sources ID Verify from Equifax ! Product Opinions & Grading ! Product Appraisals ! 3. Ability Privacy Policy ! Industry practices ! TRUSTe seal ! (SSL, etc.) 11

eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 2. Experiential Sources 4. Motivation Feedback Forum Policies (comprehensive) ! ! Tradenable escrow SafeHarbor investigations ! ! Product authentication Disallowed products ! ! SquareTrade dispute ! 1. Authoritative Sources resolution ID Verify from Equifax ! VeRO notice of IP ! Product Opinions & Grading infringement ! Product Appraisals ! 3. Ability Privacy Policy ! Industry practices ! TRUSTe seal ! (SSL, etc.) 12

eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 2. Experiential Sources 4. Motivation Feedback Forum Policies (comprehensive) ! ! Tradenable escrow SafeHarbor investigations ! ! Product authentication Disallowed products ! ! SquareTrade dispute ! 1. Authoritative Sources resolution ID Verify from Equifax ! VeRO notice of IP ! Product Opinions & Grading infringement ! Product Appraisals ! 3. Ability Privacy Policy ! Industry practices ! TRUSTe seal ! (SSL, etc.) 5. Trust Management Identify reliable providers of ! feedback 13

eBay Builds Confidence Trust Establishing Services Trust Ensuring Services 2. Experiential Sources 4. Motivation Feedback Forum Policies (comprehensive) ! ! Tradenable escrow SafeHarbor investigations ! ! Product authentication Disallowed products ! ! SquareTrade dispute ! 1. Authoritative Sources resolution ID Verify from Equifax ! VeRO notice of IP ! Product Opinions & Grading infringement ! Product Appraisals ! 3. Ability Privacy Policy ! Industry practices ! TRUSTe seal ! (SSL, etc.) 5. Trust Management 6. Risk Transfer Identify reliable providers of User Agreement ! ! feedback Fraud Protection Insurance ! PayPal Buyer Protection ! 14

How do other online businesses compare? 15

Is trust different offline? 16

OECD Privacy Principles Trust Establishing Services Trust Ensuring Services 2. Experiential Sources 4. Motivation Openness Accountability ! ! Individual participation ! 1. Authoritative Sources 3. Ability Purpose specification Data quality ! ! Security safeguards ! 5. Trust Management 6. Risk Transfer Use limitation ! Collection limitation ! 17

How can we apply the same Trust Enabling™ principles to an offline confidence problem? 18

Recommendations for Restoring Confidence in Capital Markets Trust Establishing Services Trust Establishing Services Trust Ensuring Services Trust Ensuring Services 2. Experiential Sources 2. Experiential Sources 4. Motivation 4. Motivation " " " Participation of stakeholders " Participation of stakeholders Honesty of leaders Honesty of leaders " " " " Relying party representation Relying party representation Independence of roles and policing Independence of roles and policing " " " " Tone of leaders Tone of leaders Motivators/interests Motivators/interests " " " " Tough decision making by leaders Tough decision making by leaders Ethics/values/spirit/culture Ethics/values/spirit/culture " " " Information distribution " Information distribution Personal accountability Personal accountability " " " " Performance benchmarking Performance benchmarking Recourse/enforcement Recourse/enforcement " " " " Metrics tracking and reporting Metrics tracking and reporting Industry Rules & Regulations Industry Rules & Regulations " " " " Systems for financial transparency Systems for financial transparency Oversight & Standards Bodies Oversight & Standards Bodies " " Government’s roll Government’s roll 1. Authoritative Sources 1. Authoritative Sources " " Independent Boards of Directors Independent Boards of Directors 3. Ability 3. Ability " " Encouragement of candor Encouragement of candor " " " Certification by CEO & CFO " Certification by CEO & CFO Awareness of financial systems Awareness of financial systems " " " " Independent Auditors Independent Auditors Standardized stock rating systems Standardized stock rating systems " " " " Unbiased third party analysts Unbiased third party analysts Internet technologies Internet technologies " " Global industry- Global industry -specific accounting standards specific accounting standards " " Board quality ratings Board quality ratings " " Machine/human understandability Machine/human understandability 5. Trust Management 5. Trust Management 6. Risk Transfer 6. Risk Transfer " " Stakeholder liability Stakeholder liability 19 " " Guarantees/warranties on quality of securities Guarantees/warranties on quality of securities