Saturday, March 04, 2006

Q&A With Schwab CPO Janet Chapman

In response to the announcement of Charles Schwab’s security guarantee, I contacted Janet Chapman, the company’s chief privacy officer.

I was interested in learning more about Schwab’s view of privacy, how closely the privacy organization interacts with marketing, and the connection between communications and trust. Conducting a brief Q&A, I have shared my new insight with you below.

Note Ms. Chapman’s comments related to privacy training and the direct line for queries on privacy issues. Her comments indicate a strong level of understanding and commitment to privacy throughout the organization and how effectively communicating with the customer on such issues leads directly to greater trust. As Larry Ponemon’s research has shown, a trusting relationship is a more profitable relationship.

Private Communications: Please describe how Charles Schwab’s privacy organization works with corporate communications/marketing.
Janet Chapman: The Privacy Office reports into the Central Marketing Division and the Chief Marketing Officer, who sits on Schwab's Executive Committee. When I assumed responsibility for the Privacy Office 3 years ago, it was agreed that privacy should be viewed as a strategic imperative and that this would be better enabled within the marketing organization. In Marketing, the privacy function can be more preemptive and proactive. Also, this arrangement helps facilitate good employee communication, embedding privacy awareness throughout the organization

PC: Can you provide any examples of how Schwab’s investments in data protection and privacy have paid off in terms of customer trust?
JC: A central theme for Schwab’s Privacy efforts is client education – being proactive in helping clients become educated about I.D. theft prevention and helping them protect themselves. We've focused on this after checking in with our customers and learning what they care about. In 2003, we surveyed our customers to find out if they care about privacy and learned that 96% of respondents rated privacy as Very Important or Important. ID theft prevention was their top concern.

In 2004, we rewrote our privacy policy and annual notice, adding a section on ID theft prevention. We also overhauled and expanded our privacy training for Schwab employees. We created a special team of client service representatives and gave them specialized training about ID theft prevention and advice to give clients who think they may have been victimized

We also added more in-depth information on and our affiliates' Web sites about such topics as: how to prevent ID theft, how to detect a Phish, and we increased the prominence of ID theft protection information. We encourage our clients and other consumers to visit our Privacy Information Center on by clicking on the “Protect Your Account" button on the client log-in page, .

To make it easier for clients to ask questions, we also introduced a Privacy e-mailbox for clients to directly contact Schwab with privacy/security concerns. We believe that our clients trust us because of our advocacy on their behalf.

PC: The Charles Schwab security guarantee is a bold move for an organization of your size. How did this come about and can you offer any insight as to the underpinnings of the program that give you the confidence to offer the guarantee?
JC: Our historical practice has always been to take care of our clients in instances where unauthorized account activity has occurred. With rising public concern over identity theft and account security, we realized the importance of articulating that practice as a public promise. Our clients need to know their money is safe at Schwab.

PC: The security guarantee is less than one week old. What has the response been like from customers? Potential customers? Competitors? Industry analysts?
JC: The response has been universally positive, including the response from our own employees.


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