Posted on December 1, 2005 by Ronald London

Many Consumers Believe Online Banking to be Too Risky

  • Email This
  • Print
  • Comments
  • Share Link

Posted by Peter Mucklestone and Stuart Louie

Despite significant improvements by Banks and regulators in both (i) educating consumers about fraudulent phishing, pharming, spyware and key logging schemes and (ii) developing technologies and procedures to defend against such practices, consumers still believe that online banking may be too risky. Susanna Montezemolo, a policy analyst at Consumers Union, appreciates the concerns of these consumer noting that, "Consumers can do everything rightて絜ot give out passwords or financial informationて礼nd still become victims."

Whether or not such consumer perceptions are justified and despite the fact that traditional forms of banking-related theft such as check fraud continue to be more prevalent, such fears have contributed to the slow growth of online banking. A recent survey commissioned by the Internet security company Entrust found that "eighteen percent (18%) of Americans who have banked online now do so less, or not at all, because of security concerns."

As online criminals become more sophisticated and identity theft schemes become more complex, it is likely that the costs to Banks in connection with providing a secure, online-banking website to their customers will increase. As such, whether or not hosting such a website remains a profitable venture could depend upon the consumer's willingness to pay for additional online protections. Survey results to date have been contradictory. The Entrust survey found that eighty-one percent (81%) of consumers are not willing to pay for extra-online banking protection. A recent survey conducted by Unisys suggests that nearly forty percent (40%) of Americans are willing to pay fees for more protection (up from twenty-seven percent (27%) last year). The only concrete take-way? If Banks hope to attract customers to their online services, they will need to focus on creating a safe and secure online banking environment.

For more information or to read the articles, see here and here.
Tags:
Trackbacks (0) Links to blogs that reference this article Trackback URL
Comments (0) Read through and enter the discussion with the form at the end
Post A Comment / Question Use this form to add a comment to this entry.







Remember personal info?
Send To A Friend Use this form to send this entry to a friend via email.