Assurance policies in cyberspace

Julián de Cabo. Professor. IE Business School

5 September 2006

Spaniards are wary of e-commerce because of what they perceive to be a lack of security. Why, then, is business on the internet booming in other countries?

Demanding business assurances

Did you give your customers a stamped photocopy of your national identity card during your last meeting? Did you attach a copy of the articles of incorporation of the company for which you work? Or, did you just give them a business- card? Later, if your business transactions with them are not satisfactory, please don’t complain; you will have only yourself to blame. If your customers don’t enjoy legal security, how can they possibly trust you? …. Or can they?

If the above examples seem a little extreme, they are really only an attempt to put into context the problem of Internet security, which, when you think about it, is not so different from the problem of security in life itself.

Can security be objective?

We often attribute the wariness that Spaniards show towards e-commerce, or our own mistrust of the Internet, to the feeling of insecurity that stems from the lack of digital certificates or official documents that could certify the identity of the parties we are doing business with. But we often forget the feeling of security is subjective--rather than an objective--perception. It is not so much that things are or are not safe in and of themselves, but rather that we perceive them as such. We trust that they will not cause us problems.

For example, I could say that for me, a motorcycle enthusiast of many years, knowing that my motorcycle has safety features is part of what makes me see it as a safe vehicle. But that would not prevent my mother-in-law from feeling somewhat uncomfortable were I to take her for a ride, particularly on a long journey, even though it is the same bike. The only thing that changes is our perception of it.

If we take the example further, the next question would be: What would make my mother-in-law feel safer and enjoy the ride more? Would it help if I told her that my motorbike is fitted with ABS brakes? Or would it be more convincing if her best friend told her that I took her for a ride yesterday evening and she enjoyed it?

Basically, something very similar is happening with the perception of safety on the Internet. In countries such as Spain, we entrust the development of the net to the State, which reacts by producing a digital national ID. Elsewhere, consumers easily accept that there is no user classification, such as eBay. And the result is that American consumers are capable of sending many thousands of dollars to accounts they know nothing about, simply because the owner of the account has a classification that is formed by the perceptions and experiences of others. They think that someone who has been using the system for five years and has a 100% solid reputation will not risk losing it through one isolated transaction. And they don´t mind not knowing the real name of the recipient of their money.

But of course, we are speaking about users who, in their everyday life, accept in complete trust the cheques made payable to the bearer, convinced that they will have no problem cashing them.

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