Security fears scare off US Web banking customers

Security fears scare off US Web banking customers

The fear of identity theft is scaring US consumers away from using online banking services, according to research commissioned by Texas-based e-security firm Entrust.

The survey of 710 US adults, which was conducted by InfoSurv, found that 18% have reduced their use of Web banking services, or have stopped banking online completely, in the past 12 months due to fears of ID theft.

The vast majority of consumers - 94% - said they were willing to use additional security measures such as strong authentication when banking online, especially when conducting higher value transactions such as money transfers.

But 81% of respondents also said that they didn't want to pay extra for any additional security measures. Entrust says that while the fear of online identity theft and fraud is high, so too is the insistence from consumers that they should not shoulder any extra security costs.

Commenting on the study, Kevin Simzer, SVP at Entrust, says: "The message is clear - consumers are ready and willing to use more security to protect their own identities, and in like fashion, validate the legitimacy of their online banking site to guard against phishing attacks."

Last month the US Federal Financial Institutions Examination Council (FFIEC) issued new guidance on the risk management controls necessary to authenticate the identity of customers accessing online financial services. The regulator gave the banking industry until the end of 2006 to introduce multi-factor authentication for high risk Internet transactions.

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