Over half of Internet banking users (57%) would leave their bank in the event of a single security breach, according to research conducted by the Ponemon Institute and sponsored by online risk management software vendor Watchfire.
Larry Ponemon, chairman and founder of Ponemon Institute, says trust in banks is becoming the vital component in customer loyalty and brand strength and, even among banks with the highest level of consumer trust, it only takes one privacy breach to destroy the relationship.
"Not only do customers expect that their bank has procedures in place to protect them from identity theft, but if it becomes obvious that those safeguards are not working, they will walk," says Ponemon.
The Web-based survey also found that customers that have a high level of trust in their Internet bank are more likely to perform complex online tasks, such as automated bill payment.
Peter McKay, president and CEO of Watchfire, says: "Mainstream media focus on phishing and identity theft is pushing online privacy and trust to the forefront and customers are more anxious than ever before of how their personal information is being used.
"Banks need to keep a close eye on the integrity of this critical online channel or face costly customer defections."
But despite the security concerns, over half (59%) of respondents said they are still "much more confident" or "more confident" in online banking than in branch banking.
When asked what steps a bank should take to gain consumer trust, most respondents called for a limit on the sharing of personal information with third parties, fewer online ads or marketing promotions and identity verification when conducting transactions online.