20 May 2018

Consumer confidence in online banking 'fragile' - FSA

23 January 2006  |  10154 views  |  0 user man and screen

The majority of consumers (77%) would stop using Web banking services altogether if they were forced to foot the bill for online fraud, according to research commissioned by The Financial Services Authority (FSA) which is calling on banks to do more to educate customers about Internet security in order to stem losses.

Figures from Apacs show that bank losses from Internet fraud more than trebled to £14.5m last year. But a survey of 1500 Internet users conducted for the FSA's Financial Risk Outlook report found that if banks decided to shift liability of the losses towards the consumer, the vast majority would stop using the services.

The FSA says nearly all users (95%) surveyed believe that at least some security responsibility should lie with the bank, while just under half (45%) say banks should take sole responsibility for fraud.

But while many Internet users are protecting themselves by installing security applications on their PCs, the research shows that over a quarter did not know when they last updated their software or updated it infrequently. Around five per cent of online bankers have no security software installed on their PC at all.

Philip Robinson, financial crime sector leader at the FSA, says most consumers recognise they have some responsibility for security but are not necessarily following this obligation through.

"To tackle the losses associated with fraud, banks should continue to drive security and this must include educating consumers on the importance of protecting themselves," says Robinson.

The FSA is warning banks that fear of fraud is already causing customers to limit use of Web banking services and consumer confidence in online banking is "fragile".

The regulator is calling on banks to do more to educate customers about security, and says that even those who use the Web regularly are either "extremely" or "very" concerned about the risk of fraud when making an online transaction.

In an effort to stem online fraud losses, more banks are actively promoting the use of security technology among their online banking customers.

Earlier this month Barlcays Bank said it was teaming with security software vendor F-Secure to provide discounted anti-virus and spyware technology to its online banking users. While in September rival high street bank Lloyds TSB partnered with Internet security firm Zone Labs to provide its customers with a free PC security scan and discounted anti-virus software.

Last year Lloyds TSB also began trials of a Vasco security device that generates single-use passwords in a bid to protect its Web banking customers from phishing and spyware scams. The key-ring sized devices are being rolled out to 30,000 Internet banking customers.

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

FSA urges City firms to prepare for bird flu

FSA urges City firms to prepare for bird flu

16 January 2006  |  9775 views  |  0 comments
FSA urges firms to improve disaster recovery planning

FSA urges firms to improve disaster recovery planning

14 December 2005  |  13529 views  |  0 comments
FSA moves to cut red tape

FSA moves to cut red tape

02 December 2005  |  7048 views  |  0 comments
FSA warns firms to step up MiFID preparations

FSA warns firms to step up MiFID preparations

21 November 2005  |  9067 views  |  0 comments
FSA warns of criminal gangs inside City banks

FSA warns of criminal gangs inside City banks

16 November 2005  |  8458 views  |  0 comments
Lloyds TSB trials Vasco online authentication device

Lloyds TSB trials Vasco online authentication device

14 October 2005  |  13561 views  |  0 comments
Lloyds TSB to offer PC security scans, discounted anti-virus software

Lloyds TSB to offer PC security scans, discounted anti-virus software

26 September 2005  |  15328 views  |  0 comments
UK consumers unwilling to pay for Web banking security

UK consumers unwilling to pay for Web banking security

03 August 2005  |  6921 views  |  0 comments
ID theft fears hitting online banking

ID theft fears hitting online banking

24 May 2005  |  9142 views  |  0 comments
Web security fears hinder move to online banking - BT

Web security fears hinder move to online banking - BT

11 January 2005  |  8479 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit http://go.jumio.com/finextraAdVisit www.vasco.com/news/mobile-first

Top topics

Most viewed Most shared
Ripple moves to build ecosystem around XRPRipple moves to build ecosystem around XRP
9529 views comments | 5 tweets | 7 linkedin
HSBC claims blockchain breakthrough for trade financeHSBC claims blockchain breakthrough for tr...
9206 views comments | 14 tweets | 16 linkedin
IT implications and the need to pivotIT implications and the need to pivot
9200 views comments | 2 linkedin
Irish bank caught in social media spying stormIrish bank caught in social media spying s...
8012 views comments | 25 tweets | 16 linkedin
Former JPMorgan blockchain leads unveil new startupFormer JPMorgan blockchain leads unveil ne...
7153 views comments | 2 tweets | 2 linkedin

Featured job

Find your next job