Rising numbers of phishing attacks and increasing reports of lost or stolen customer data are causing US Internet users to lose confidence in online banking and e-commerce services, according to a study by technology research firm Gartner.
The survey of 5000 US adults found that around three quarters (77%) of Internet users shopped online in the 12 months ended in May 2005 and an estimated 73% of respondents regularly logged on to banking accounts and 63% paid bills online.
But around a third (30%) of the Web banking users say that online attacks have influenced their online banking activities. Over three-quarters of this group log in less frequently and nearly 14% have stopped using EBPP services on bank sites.
Furthermore, three out of every four online shoppers are more cautious about where they buy goods online, and one of three are now buying fewer items online than they otherwise would because of security concerns.
Avivah Litan, VP and research director at Gartner, says companies need to take steps quickly to beef up online security: "Businesses cannot rely on the Internet to lower costs and improve marketing efforts indefinitely if consumer trust continues to decline."
Separate research commissioned by TNS NFO and The Conference Baord backs up the figures, with 41% of Internet users reportedly purchasing less online due to security fears.
The Gartner study also shows that the number of consumers receiving phishing attack e-mails continues to rise and increased 28% in the 12 months ended in May 2005. Extrapolating from its poll, Gartner estimates that 2.4 million online consumers lost money directly because of the scams. Of these, approximately 1.2 million consumers had a total of $929 million siphoned from their accounts during the year preceding the survey, although most of the money stolen was repaid by banks and credit cards.
More than 80% of respodents to the Gartner survey said online attacks have affected their trust in e-mail from companies or individuals they don't know personally. Of these consumers, more than 85% delete suspect e-mail without opening it. Litan says this figure has serious implications for banks and companies that want to use the e-mail channel to communicate more cost-effectively with customers.