Identities at Risk –Online Bankers and Brands

May 7, 2015
/   Spotlight

*Disclosure: Banking.com is powered by Digital Insight Security has long been, and continues to be, a hot topic in the financial services industry. From new tech developments to hackers, security is top of mind...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Financial Literacy Month: How are you celebrating?

March 22, 2013
/   Insights

With April approaching, it’s almost time to kick off Financial Literacy Month! Strongly supported by the United States Congress and the Financial Literacy and Education Commission, Financial Literacy Month aims to promote the importance...

Industry Perception, Optical Delusion

January 14, 2013
/   Insights

In Washington, they talk a lot about ‘optics.’ This has nothing to do with regulatory scrutiny, or government mandates on eyeglasses. It has to do with perception—how something looks, the way a particular story...

The level of hype surrounding wearable technology almost seems undeserved, particularly given the relative lack of adoption. Sure, there are cool new devices emerging on a regular basis, the early adopters are like kids in a candy store, and it’s already had a big effect in activities like fitness. But for a discipline that’s actually been around for quite a while—an eternity in tech time—it’s surprising how few people have embraced the new capabilities.

In this context, here’s a new twist: What if you had no choice but to wear one or more of these devices all the time? What if avoiding them put you and your family in financial peril?

Yes, it’s a valid concern. In fact, it’s likely to become more valid as these capabilities become more widespread.

Here’s the reality: Many of these devices serve up an astonishing amount of personal data, particularly related to health issues. While consumers like knowing how much they walk or how many calories arrived via that burger-and-fries combo, those same devices also monitor blood pressure, heart rate, exercise routines, sleep patterns and so on. Some gadgets can even detect health conditions such as diabetes and glaucoma, and of course, how those diseases are being treated.

However, doctors and their patients are not the only ones interested in those details. So are insurers.

The insurance industry obviously wants to gather every bit of information on an individual before offering a policy. Many offer discounts for transitioning toward a healthier lifestyle, and they want proof of that happening. Now, since they can get all this information in practically real time, why wouldn’t they make it a pre-requisite?

The topic is already generating considerable debate in Switzerland, home to many trends in insurance. Hanspeter Thür, the nation’s official data protection commissioner, recently attended a panel discussion on the new capabilities emerging through the adoption of wearable technologies, and used the occasion to sound the alarm on potential abuse (if it can even be called that). He warned that if this trend continues, it could potentially lead to discrimination against those who opt against wearables.

Nothing says ‘futuristic’ like individuals clad in computers, and we’ve all seen these scenarios play out in movies. But this is real, and it’s now—if individuals refuse on principle to wear devices that send out every kind of health information to their insurers, could those companies then refuse to grant health or life insurance policies?

What we now call HIPAA (the Health Insurance Portability and Accountability Act) was supposed to cover all this, and indeed a core component of the sweeping legislation did establish national standards for electronic health care transactions. That’s great, but this was back in 1996, when the Internet had just entered the mainstream and even having a website seemed like a novelty. This is a very different world we’re in now.

It’s easy to see the merit in both arguments. It seems downright cruel to force people to constantly wear a bracelet or hook themselves up every night to health-tracking devices, just so that very private information can be sent out to faceless monitors at locations around the world working for giant insurance corporations. At the same time, it’s understandable that those companies want all the information they can get when making decisions on what kind of health and life insurance policies to offer.

New technologies often pose this kind of risk—we get more capabilities but give up more privacy in the process. Many mobile apps, for example, quite legally acquire information on our daily habits: what we search for, who we communicate with, how we make buying decisions. Wearable technologies simply lead us further down that road.

The real question is what we can do about it. One obvious answer is for the government to step in, and if HIPAA already seems burdensome, imagine what more regulations covering all the new capabilities will look like. On the other hand, it’s always possible that industry associations—both on the technology and insurance sides—will come together to create comprehensive standards that make sense for all parties. Any takers?

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp