Podcast with Ric Fleisher — Business of Personal Trust Seal
In our blog “What’s A Unit of Trust Worth These Days’ we said a new generation of technology and services, for instance electronic medical records, will find it difficult to gain consumer traction until there is some mechanism that accounts for individual authentication , what we called the “trust thing”. How do we know that people (or companies) on the internet are who or what they purport to be? How do you know that the doctor giving you online medical advice is really a qualified doctor? How do you know that the eBay vendor will really send you the widget you purchased? This is equally the problem in the offline world, particularly the finance industry where, by definition, the fractional reserve banking system is based on trust. But at least you can get some comfort by walking into a brick-n-mortar bank, and yelling at the manager, or filing a lawsuit on a tangible entity. Not so with online activity.
Consider these points:
- The Internet Crime Complaint Center (IC3), a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA), received 275,284 complaint submissions in 2008, a 33.1% over 2007. That’s more than one internet complaint filed every two minutes.
- Non-delivered merchandise and/or payment was, by far, the most reported offense, comprising 32.9% of referred complaints. Internet auction fraud accounted for 25.5%, credit/debit card fraud made up 9.0%, and confidence fraud, computer fraud, check fraud, and Nigerian letter fraud round out the top seven categories of complaints referred to law enforcement during the year.
- Of the complaints that reported a dollar loss amount, the median amount was $931.00 per complaint.
$900 probably is not going to break you, but the bigger the risk (e.g. personal health information), the more of an inhibitor the “trust factor” will be to online usage.
We interviewed Ric Fleisher (no relation to your blogger), Senior Vice President of Honesty Online (“HO”), the developer of an online application that purports to solve the personal authentication and identification problem. Here are a few highlights of the interview.
- HO provides users with an electronic credential that verifies their identity. The basic credential validates the existence of a person’s identity — name, address and date-of-birth. The credential can be upgraded to verify a clean criminal record, education accreditation and degrees, employment history, and professional certifications and licenses.
- HO got started credentialing people that use online dating services and is branching out to other social networks that provide healthcare, legal, or other types of professional advice. They also are selling credentials to job seekers wishing to pro-actively show verification of their employment and professional records.
- The credential cannot be spoofed or placed in an unapproved location. (HO has patents pending on these technical features). Therefore the purchase of one credential can be used simultaneously to verify identification on dating sites, social networking sites, blogs, and electronic resumes.
One interesting point from 2i’s perspective is the price point. Depending on the various levels of verification, the retail cost of a credential ranges from $4.99 to $29.00. Does this answer our original question, What’s a unit of trust worth? Or is it $931?
We’ll be posting blog in the near future researching some other credentials and site seals (Verisign, Thawte, RatePoint, etc.) and extending our line of reasoning to make an attempt at translating an intangible unit value of trust to a company valuation.
You can listen to our podcast of Ric Fleisher in its entirety or in three sections here.
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