15 December 2017
visit www.solutions.lexisnexis.com

Security fears scare off US customers from online banking, shopping

27 November 2006  |  11920 views  |  0 Man holding Tablet computer

Nearly $2 billion in US e-commerce sales will be lost in 2006 due to consumer concerns over the security of the Internet, according to a survey by Gartner, which also found that fear of fraud and identity theft have prevented around 33 million US adults from banking online.

The survey of 5000 online US adults in August 2006 found that recent security breaches - both online and offline - are having a significant impact on buying patterns and use of Web banking facilities.

Nearly half of those surveyed (46%) said concerns about theft of information, data breaches or Internet-based attacks have affected their purchasing payment, online transaction or e-mail behaviour. Of all the behaviors affected, online commerce - which includes Internet banking, online payments and Web shopping - is suffering the most.

Almost nine million US adults have stopped using online banking, while another estimated 23.7 million won't even start because of fears over security.

Garnter estimates that approximately $913 million in e-commerce sales was lost in 2006 because of security concerns among online shoppers. The analyst group says another $1 billion was lost from consumers who refuse to shop online because of security worries.

Avivah Litan, vice president and distinguished analyst at Gartner, says financial institutions and e-commerce providers need to beef up security to retain customers, but they must be careful to keep the added measures convenient.

"A layered approach to solving security problems is the most effective," says Litan. "Companies should implement back-end fraud detection, stronger user authentication (beyond single factor passwords), transaction verification for high-risk transactions, and data masking/truncation of sensitive data that is shown on Web-based screens."

The research also shows a growing consumer distrust of e-mail. Nearly 70% of online consumers whose behaviour has been affected by recent security breaches say their concerns have affected their trust in e-mail from companies they don't know personally. Of these, more than 85% delete suspect e-mails without opening them.

"This figure has serious implications for banks and other companies that want to use the e-mail channel to communicate more cost-effectively with their customer base," says Litan.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Phishers angling for fatter fish

Phishers angling for fatter fish

10 November 2006  |  8066 views  |  0 comments
US customers trust banks to guard their data, says ABA

US customers trust banks to guard their data, says ABA

25 August 2006  |  8334 views  |  0 comments
Gartner calls on banks to adopt Web 2.0 technologies

Gartner calls on banks to adopt Web 2.0 technologies

15 August 2006  |  22432 views  |  0 comments
Fraud fears scare off US Web shoppers

Fraud fears scare off US Web shoppers

23 May 2006  |  7609 views  |  0 comments
Fraud fears scaring off Canadian Web banking customers

Fraud fears scaring off Canadian Web banking customers

12 April 2006  |  7628 views  |  0 comments
Data security fears outrank terrorism, environmental concerns  - Visa

Data security fears outrank terrorism, environmental concerns - Visa

25 January 2006  |  7216 views  |  0 comments
Security fears scare off US Web banking customers

Security fears scare off US Web banking customers

09 November 2005  |  7058 views  |  0 comments
Fraud fears hitting online shopping

Fraud fears hitting online shopping

19 October 2005  |  8666 views  |  0 comments
Phishers exploiting lax ATM security - Gartner

Phishers exploiting lax ATM security - Gartner

02 August 2005  |  8984 views  |  0 comments
ID theft fears hitting online banking

ID theft fears hitting online banking

24 May 2005  |  9073 views  |  0 comments
Phishing scams cost US financial firms $1.2 billion - Gartner

Phishing scams cost US financial firms $1.2 billion - Gartner

07 May 2004  |  9657 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.thomsonreuters.infovisit www.atos.net

Top topics

Most viewed Most shared
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
10471 views comments | 17 tweets | 25 linkedin
satelliteRipple completes XRP Lockup
9847 views comments | 3 tweets | 2 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
9244 views comments | 17 tweets | 36 linkedin
Brits flock to digital-only banksBrits flock to digital-only banks
7359 views 11 comments | 11 tweets | 15 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
6708 views comments | 19 tweets | 20 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job