The Financial Services Authority is urging banks to work
with their online banking customers to fight fraud.
The financial watchdog warned that public confidence is internet
banking is fragile, with more than half of thosed polled feeling
concerned or very concerned about fraud risks.
According to figures from the UK Payment Association, Apacs, UK
banks lost £14.5m through internet fraud in the six months to June
2005, a three-fold increase on the same period in 2004.
Research by the FSA shows that 5% of online banking customers
have no security software installed on their PCs, citing as reasons
the cost, the belief that they don’t need it, or don’t understand
what it is.
Among those customers that did have security software, 25%
either updated it infrequently or did not know when they last
updated it.
The findings will add to pressure on banks to take action.
Several, including Lloyds TSB, are experimenting with two-factor
authentication to improve security, and Apacs has produced
standards on two-factor authentication.
Barclays is offering online banking customers discounted
F.Secure software that includes anti-virus and anti-spyware
protection via the Barclays website.
Nationwide is telling users of its online banking service that
any e-mail sent from the building society will include a bitmap
image featuring the customer's postcode.
“If consumers were asked to foot the bill for internet banking
fraud losses, our research shows they would stop using the tool,”
said Philip Robinson, financial crime leader at the FSA.
“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,” he said.