Boston, April 10, 2000 - New legislation introduced by U.S. Senator Richard C. Shelby (R-AL) that would require all financial institutions to obtain customers’ affirmative consent prior to profiling behavior such as where and how an individual spends and receives his/her money, and sharing the data, will have many unintended consequences says Walter Kitchenman, a Senior Consulting Analyst for TowerGroup. Focused exclusively on the application of information technology to the global financial services, TowerGroup conducts research and consults for clients wherever financial services and IT overlap.
"The privacy storm is largely the result of three converging policy fronts," says Kitchenman. "Financial modernization legislation in the US, the use and possible abuse of Internet technologies, and the issuance of the E.U. Directive on Privacy which has led the US Commerce Department to negotiate a safe harbor agreement for US companies."
Kitchenman believes that "Senator Shelby’s proposed legislation clearly adheres to many European privacy standards, as does pending legislation at the state level."
Kitchenman adds that many US consumers underestimate the benefits of profiling and sharing information in the mature US market. "Odds are that a US consumer has a credit card, mortgage, or investment account, from an institution in another state with which they have no other relationship." On the other hand, "no single institution in the US has a complete picture of a consumer without sharing information either." It is very different in Europe, he notes, "where a handful of banks are dominant, and activity revolves around a checking account and a brick and mortar presence."
Walter Kitchenman, Senior Analyst, Consumer Credit Practice, will lead a panel discussion on April 14 at 10:15 am titled, "Will Privacy Legislation Close the Door on Mining Customer Data? Point & Counterpoint," at TowerGroup’s 2000 Conference — "Turning Vision into Action" — at the Sheraton Boston Hotel. The panel will review the latest policy developments and some of the benefits of open data as well as the risks that concern privacy advocates. Panelists include:
- Fred H. Cate, Professor of Law, Indiana University School of Law — Bloomington
- Deanna Caldwell, Deputy Project Manager, FDIC
- Julia Johnson, Director, Information Policy & Privacy, Bank One Corp
- Doug Johnson, Senior Policy Analyst, American Bankers Association
TowerGroup delivers thought leadership on the impact of information technology in the global financial services industry. Their research and advice is sought after to help clients navigate IT transformations successfully, and their clients are the largest, most influential, and most successful at what they do. They are banks, securities and investments firms, insurance companies, software and hardware providers, and systems integrators. A significant number of clients are other research and consulting companies, including those most acknowledged as leaders in their respective fields.
