The study evaluated the effectiveness of authentication measures by asking participants to conduct common online banking tasks. Each time they logged in, they were presented with clues that their connection was insecure.

The research found that the vast majority of participants - 97% - entered their account details and passwords even when their site authentication images had been removed. The remaining three per cent chose not to log-in because of security concerns.

Bank of America, ING and Alliance & Leicester, are among a number of financial firms that have signed up for an image authentication system provided by PassMark Security, a California-based firm that was bought out by RSA Security last year.

Bank of America is using the PassMark technology as the basis of its SiteKey authentication service which is being rolled out to its 14+ million online banking customers. Sanjay Gupta, e-commerce and ATM executive for Bank of America, told New York Times reporters that he was not troubled by the research, adding that the siteKey service was "only a single part of a larger security blanket".

However the study found that the use of site authentication images may cause customers to disregard other important security indicators.

Many sites that have deployed site-authentication images instruct customers that the presence of their images is a sufficient condition for security, when it is only one of many necessary conditions, says the report.

The academic study also found that all customers continued to enter log-in details if HTTPS indicators were removed from the passworrd-entry page. Furthermore over half (53%) entered passwords when a bank's login page was replaced with a warning page.

Read the report here: