Is Internet Banking Private?
By Gail Rickards
This is the first of a two-part article on privacy issues
related to online banking. Every person has her own definition
of what constitutes an invasion of privacy, and we all want
to determine what and with whom personal information is shared.
The handling of private information in the internet space
is particularly complex and increasingly controversial.
The place to start talking about information sharing is with
a background discussion about…information.
In Control In Cyberspace?
On the Internet, information about us--what Web sites we go
to and how often, what topics, products, and services interest
us, what we put in our shopping carts (and if we buy or abandon
the cart's contents), and where we go next--is tracked. This
is called "click-stream data" and, yes, it is collected and
Personally, I've never been asked for my permission before
this kind of information is gathered; in fact, I didn't even
know it was happening when I first started using the Internet.
So much for thinking I had control over what personal information
strangers have about me!
The Cookie Factor
Information gathering on the Internet doesn't stop with click-stream
data. Every site you go to plants a small data file called
a "cookie" on your computer's hard drive and brings data back
to the site. Cookies can be very useful since they make reconnecting
with the site faster and contain other information that makes
using the site easier.
Cookies accumulate in a folder called a "cache," and unless
you go looking for them in your computer, you won't know they're
there. If you look at the cache, however, you'll find an identifying
number, date, and time on each cookie document. Click on a
cookie, and you'll be connected to the spot on the Internet
it represents. Remember, the space has your information, too,
and can find you just as easily.
What Happens to All This Information?
This is the heart of the privacy concern. Information is collected
for a variety of reasons: It's a part of a good security program;
it measures the traffic (or visits) to a site; it shows what
visitors want and don't want; it tells marketers which services
to offer and to which group of people; and it reveals a site's
navigational glitches. This data mining obviously benefits
internet companies, but there is also a benefit to users whose
tastes and preferences may guide the site's navigation and
Benefits aside, there is real risk associated with this information;
namely, that it can be shared with or sold to others. And
if it is collected without our consent, it can certainly be
passed on in the same way. And once passed on, who can say
what the next recipient will do with it?
Does I-Banking Collect Information?
As soon as you enter your I-banking site via the login screen,
you enter a secure, protected site. However, a cookie is placed
on your computer, and every click you make and transaction
you conduct while you're in the site is tracked by the bank.
What Do Online Banks Do With the Data?
In traditional banking, procedures are set up to track the
progress of your transactions in order to ensure that your
deposit, check, or payment is accurately processed. Bankers
call this creating an "audit trail," and it's critical for
accounting, safety, and improving operations. In I-banking,
tracking your clicks creates an essential audit trail in a
Marketing products and services is part of growing a banking
business, so both traditional and I-banks analyze information
about what customers like, dislike, and demonstrate a need
I-banks also partner or affiliate with other financial service
companies to provide added services--insurance or stock brokerage,
for example. Online banking sites can be full of "click here"
messages, some linking to outside financial partners, some
to the bank's own services. Relevant information is usually
shared with partners and affiliates to make the process run
Where Does Your Privacy Fit Into All This?
In the second part of this article, we'll talk about recent
privacy legislation, third-party watchdogs, and steps you
can take to protect your privacy--from cookie control to masking
your identity. In the meantime, be sure to read the Privacy
Policy that typically appears on the home page of your online
banking site. It's often at the bottom of the screen, next
to the security policy.
Click here to
read part two of Is Internet Banking Private?
Do you have questions, comments, or topic requests?
E-mail me at: firstname.lastname@example.org