Are Banks Failing To Keep Customers Safe Online?

A shockingly high number of online banking customers may be at risk of having their details stolen due to the provider failing to ensure connections remain secure, according to new figures.

A study by security firm Kaspersky Lab found that a third (33 percent) of financial services providers don’t offer customers a secure channel for all their online payments.

This is in spite of the fact that 62 percent of banks and other organisations have noticed a significant rise in the number of customers making financial transactions online, and 50 percent believe online financial fraud is increasing.

Managing

Of those who do offer a secure channel to their customers, just 53 percent have implemented two-factor authentication and only 50 percent have introduced a specialised, real-time anti-fraud solution– even though 22 percent believe this is the most effective form of protection available. Less than half (42 percent) extend such a solution to customer devices and only 67 percent implement a secure connection for all online payments.

Perhaps unsurprisingly, just under half of the institutions surveyed (48 percent) admit that that they are only mitigating risk rather than removing it altogether; and 29 percent say it is cheaper to deal with online financial fraud incidents as they arise rather than to try to prevent them from happening.

“The study shows that banks and payment organisations are finding it difficult to manage online financial fraud in today’s connected, omni-channel consumer landscape,” said Kirill Slavin, general manager UK and Ireland, Kaspersky Lab.

“38 percent of the organisations we spoke to admit that it is increasingly difficult to tell whether a transaction is fraudulent or genuine, with a worrying one in three opting for a ‘we’ll deal with it as it happens’ approach to fraud protection. If you consider that our own research uncovered 22.9 million financial malware attacks in 2014, targeting 2.7 million customers worldwide, it is clear that dealing with each incident individually is not a viable, long-term option.”

“Customers deserve better and so do the financial services.”

A recent study by Telstra found that security is now the top priority for most younger UK consumers when choosing a bank, and many would even consider providing a DNA sample in order to improve the security of remote banking access.

More than half of UK consumers cited the security of their finances and personal information as their top priority when selecting a financial institution, along with the organisation’s reputation for security, beating out previously top factors such as interest rates and ease of accessing funds.

The trend has been accompanied by a rise in fraud targeting online banking services, with European infections of the Dyre banking malware surging in the first quarter of this year, being used along with sophisticated social-engineering techniques to net criminals more than $1 billion (£674m) to date, according to IBM figures from this spring.

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