Building Trust in E-Commerce

Yong Ying-I, Chief Executive Officer, IDA Singapore - Speech Trusted E-Commerce in Germany and Singapore Workshop, German Centre

Yong Ying-I, Chief Executive Officer, IDA Singapore - Speech
Trusted E-Commerce in Germany and Singapore Workshop, German Centre

Singapore, 17 April 2000

H. E. Mr Volker Schlegel, Ambassador of the Federal Republic of Germany

1. I am happy to be here today to welcome our friends from Germany to exchange ideas on the important issue of building trust in e-commerce. This is in the spirit of our bilateral ICT cooperation as reflected in the Berlin-Singapore ICT MOU which calls for joint activities and the sharing of knowledge for mutual benefit.

Collaboration Between Germany & Singapore

2. Global e-commerce is projected to grow phenomenally over the next few years. Companies across the spectrum of industries are all beginning to understand that they must have an online strategy. While e-commerce took off first in the United States, we are now seeing explosive growth in both Europe and Asia. Germany is at the centre of new economy developments in Europe. We therefore have much to learn from you. Likewise, as markets in Asia have their own distinct characteristics, e-commerce in Asia may develop differently from other markets. We hope that Singapore can serve as a centre for thought-leadership on regional developments. The Singapore government therefore warmly welcomes knowledge-exchange between our 2 countries. Indeed, my Prime Minister is looking forward to his visit to Germany in June, with ICT featuring significantly on his agenda.

Trust in E-Commerce

3. While we encourage companies to embrace the Net, a 1999 survey commissioned by IDA on internet-based B2B e-commerce showed that security on the Net was a key barrier to take-up. Almost 60% of companies polled cited security of transactions as the single largest obstacle to their going online. Although e-commerce will not stop because of this concern, we do believe that the general lack of security on the Net significantly discourages business and consumer transactions.

4. Trust is the emotional confidence associated with the use of a system. For e-commerce, trust includes tangible attributes like security, reliability and the ability to deliver, as well as less tangible qualities such as trustworthiness, credibility and assurance. Trust is accumulated over time, through a series of positive experiences. But I believe that the process of building trust can be speeded up if familiar conditions in the physical commerce world such as security, privacy and legal guarantees are deemed to be in place. It is important that we address these early. For instance, a recent Gartner Group analysis predicted that a majority of e-commerce systems contain serious security flaws that may result in a loss of customer trust, and could cause some 20% of these systems to fall short of their financial objectives in the 2000 to 2002 timeframe. We must try to put safeguards in place before mishaps dissuade companies from going online.

5. Trusted e-commerce is of major interest, whether you are a policy-maker, technologist, lawyer, online business or academic. For Singapore, we are keen to develop our capabilities here because we believe we have a competitive advantage in this area. Singapore aims to position itself as Asia's trusted hub for e-commerce. Some important moves have already been made, such as putting in place the Electronic Transactions Act. But there is much more to do in this rapidly developing field:

• One of these is the adoption of information security technologies such as Public Key Infrastructure (PKI) that can help improve customer trust and reduce potential financial losses from frauds. With PKI and digital signatures, we can verify that emails came from people we know, or that the Web-site is authentic, or that our credit card number will not be easily stolen. PKI enables trust on the Internet by creating digital identities much like the role of passports in the physical world. PKI can be used for authentication, data confidentiality, data integrity and non-repudiation, all of which are integral components of trusted e-commerce.
  
  
• Another key area of work is the mutual acceptance of certificates issued by different Certification Authorities (CA). This is key because of the global nature of e-commerce and the importance of user convenience. PKI interoperability is similar in concept to interconnection arrangements in international telecommunications.

Conclusion

6. We have seen major developments in the past few years across the spectrum of legal, technical and application aspects of trusted e-commerce. As a new industry, however, there are still many major technical and legal issues that experts have to grapple with. Examples are cross-certification, cross-recognition, liability, policy harmonisation and so on. Given the demands of business, we need to move fast. We cannot invent it all internally. As such, this workshop on legal, technical and application aspects of trusted e-commerce is timely. I am therefore very pleased that this workshop is taking place to share knowledge and ideas. I look forward to furthering German-Singaporean collaboration in ICT. May I wish all of you a very successful workshop.

7. Thank you very much.