IBM Unveils Services to Protect Online Customer Privacy

Combines Forces with Watchfire to Help Companies Protect Consumer Privacy and Guard Against Identity Theft

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NEW YORK - 27 Oct 2003: Today IBM announced new services designed to help customers comply with regulations governing the collection and use of personal information on company Web sites, and reduce the risk and cost associated with unintended exposures of private customer data.

According to a recent study conducted by IBM and Watchfire, a large majority of companies unknowingly expose customer data routinely or otherwise fail to comply with privacy guidelines. The study revealed that 66 percent of financial institutions' Web sites listed in BusinessWeek's Global 1000 list collect personal information via the Web with no security features or practices to protect that data. Additionally, 18 percent of companies use forms that could potentially leak personal data to third parties.

IBM Online Business Management Services provide companies with the necessary tools to help ensure that their online operations adhere to their privacy, brand and accessibility standards. Among other things, IBM's new offerings help companies protect consumers' privacy and guard against identity theft.

"The ability to monitor, manage and mitigate the risks related to privacy breaches - such as poor data collection and sharing practices, third-party linking issues, and the use of inappropriate tracking technologies - can help firms avoid potential customer backlash and litigation, which can be devastating to a company's brand and reputation," said Harriet Pearson, chief privacy officer, IBM. "IBM is committed to lead the industry in enabling enterprises to meet the privacy expectations of consumers, government and other stakeholders."

The offerings are a result of a global joint initiative and reseller agreement between Watchfire Corporation and IBM. IBM's Online Business Management Services include Watchfire's software and complementary consulting services to assist enterprise customers in managing brand and privacy issues - whether it be online risk, brand or privacy compliance policies. IBM's Business Consulting services provide deep industry expertise, including extensive knowledge of privacy regulations and governance to help address the potential risks to a company's business.

IBM is combining its privacy and security services expertise with Watchfire's technology to automate the identification of online brand and risk issues, including privacy and accessibility noncompliance. Customers also will be able to tap IBM's skills, resources and personnel to audit their online business using Watchfire's Online Business Management software. Audit results can be used to create digital privacy policies that can then be continually enforced and audited using IBM Tivoli Privacy Manager.

Web sites have become extremely complicated, and current methods of managing online issues are both time-consuming and inefficient. Companies need assistance with their online business because there are simply too many issues to identify, spread across too many pages of a company's Web site, leaving the organization vulnerable to privacy breaches, regulatory exposure and brand erosion.

Consumer privacy protection and identity theft have become a growing problem. Not only must consumers learn how to protect their information, but companies also have an obligation to protect the information of their clients. A recent Federal Trade Commission report indicates that 27.3 million Americans were victims of identity theft during the last five years (including 9.9 million last year alone), and cost businesses almost $48 billion last year.

According to the study done by IBM and Watchfire of the financial services firms' Web sites, almost none passed Section 508 of the U.S. Government's Rehabilitation Act or the World Wide Web Consortium's Web Content Accessibility Guidelines. Both the U.S. federal law and W3C's Web Content Accessibility Guidelines provide guidance on how to create Web sites for people with disabilities, which also benefits the 76 million aging "baby boomers" in the U.S. born between 1946 and 1964 and who increasingly require help with sight and hearing problems.

These combined services provide business, marketing and legal executives with a means to validate that their corporate brand standards are adhered to online, and to validate that the online business complies with industry privacy regulations and the company's own stated privacy policy for handling personally identifiable information (PII).

For example, IBM can evaluate where personal identifiable information is gathered from a company's Web site, how it is secured, with whom the information is shared, and if that process is consistent with the company's privacy policy. Other validation includes appropriate logo usage, broken internal and external site links, spelling errors, ineffective search results, and compliance with federal guidelines outlined in Section 508 of the U.S. Government's Rehabilitation Act and the World Wide Web Consortium's Web Content Accessibility Guidelines.

"Current regulatory pressures and the growing number of vulnerabilities that expose companies to online risk and brand erosion are driving the demand for enterprise compliance solutions," said Peter McKay, president and CEO, Watchfire. "Watchfire automates this business process by identifying the broadest set of Web site issues and encouraging compliance with regulations and global legislation. Combining our software with IBM's services creates a powerful offering for organizations who need to effectively manage their online brand and risk issues."

Since many organizations' Web sites contain millions of pages, IBM also offers an automated service designed to alleviate the cost and hundreds of hours it would require to manually test and monitor each page. It can also identify problems before Web content is posted, to help ensure customer privacy protection and Web site quality at a cost that can be lower than post-deployment methodologies.

IBM Online Business Management Services include:

(For more information and to download a copy of "The State of Online Financial Services" please visit:

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