Despite the old saying that there's no such thing as bad publicity, online banking credibility took a hit today courtesy of The New York Times, page one. In the second-most-emailed article of the day, the story chronicles the threat from keyloggers around the globe. In the fourth paragraph, the article tells of a Brazilian scheme, dismantled two weeks ago, that netted $4.7 million from 200 accounts at six banks. A separate keylogging incident in France is also said to have netted $1.1 million.

Action items
While there isn't a whole lot you can do about keylogging, you should take these steps to help keep the problem in perspective:

1. Remind customer service staff that customer accounts are protected by numerous technology safeguards, policies limiting consumer liability, and internal controls that make withdrawing money online quite difficult.
2. Encourage customers to use triggered alerts so they know within minutes when a large withdrawal occurs.
3. Educate customers on the benefits of safe computing, including links to resources, downloads, and so forth.
4. Mitigate customer concern with plain-language guarantees that eliminate any customer liability for fraud perpetrated against their accounts. For a great example, see E*Trade's Compete Protection Guarantee (NB Jan 18).

For more information, read recent security articles from NetBanker or Online Banking Report (# 96/97).

--JB