| By Jim Bruene on April 1, 2003 3:54 PM | Comments (0) |
In the developed world, consumers and businesses look to banks to safeguard their assets, especially cash deposits and valuable documents. Similarly, in an age of global hacking and 24/7 access, users are looking for someone to safeguard their financial information, maintain the highest levels of privacy, and assist in making secure ecommerce transactions.
So far, financial institutions have done a good job meeting those needs.
However, increasingly sophisticated identity thieves and con artists threaten to
undue the tenuous trust built during the past 10 years. We believe banks will
realize significant increases in fraud losses unless they improve authentication
procedures and do a better job enlisting the support of users to monitor their
own accounts. Otherwise,
fraud will undermine the channel, both in the minds of users and internally
as management tires of battling fraudulent loan and deposit applications.
Financial Insights, formerly Meridien Research, estimates that identity
theft will cost U.S. financial institutions $4 billion this year, an average of
$500,000 for every bank, credit union, and brokerage in the country.1
If every bank invests a fraction of this amount in preventative measures,
everyone will be better off.
While you are at it, why not spend some extra time improving the security
“look and feel” of your site, implementing the virtual equivalent of steel
vaults, teller cages, and security guards. Non-users continue to
cite security concerns as the primary reason for not using online banking.2
Table 1 below lists general ecommerce issues on the minds of users.
Table 1
Ecommerce Security Concerns
- Online purchases are fraud-free
- Checking account and credit card numbers do not fall into the wrong hands
- Data remains confidential; away from the eyes of employees and others
- Bank deposits and investments are safe
- Loan repayment records are not lost
- Credit report info is accurate and kept private
- No one steals my identity, on or off-line
- Financial records stored on local hard drive are not stolen, lost, damaged
Source: Online Banking Report, 3/03
1Source: Locks and Keys: Customer Authentication (FIN 1227), published March 2003, by Financial Insights, an IDC company, www.financial-insights.com (no relation to our corporate identity, Financial Insite Inc.)
2Actually, it’s pretty much the only legitimate reason cited for not using online banking. Other survey responses such as “don’t need it” or “don’t want it” aren’t really reasons, just a restatement of their decision.
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