If UK banks did more to protect their online customers they could, ultimately, save themselves money, says Tim Pickard.
The reputation of high-street banks has long been suffering in the eyes of consumers. Moves to make the banking industry more profitable, such as closing high-street branches, have led to consumers believing that customer service has slipped to the bottom of the priority list.
The problem is recognised within the industry itself with NatWest running a high-profile advertising campaign convincing potential customers that there is “a different way”. But are banks doing enough to address these concerns?
Recent Mori research revealed that there is good reason for the banks to be concerned. Around 19% of the population bank online and the demographic of this group is the wealthiest of all bank users. And this figure could rise to 40% of the population if the banks get their online offering right.
So what is stopping the banks converting these potentially profitable customers to online banking users? They don’t trust their banks. The research revealed that 38% of internet users would be convinced to bank online if security measures were improved. They fear tapping in their account number over the Internet, they fear someone will guess their password and they fear someone will be able to hack into their account and transfer their life savings.
The problem of multiple passwords in terms of customer convenience and overall security have long been in question. Users find it difficult to remember multiple passwords and often grow frustrated with this technique. In addition, passwords are understood by experts to be inherently insecure. With users writing down passwords to remember them more easily or choosing easily guessable passwords such as partner or pet names, they are rapidly increasing the chances of their online bank account being compromised.
And yet the technology exists today to solve these fears at the push of a mobile phone button. During its research, Mori showed internet users a new way to log on to their online bank account using their mobile phone. When the log-in screen pops-up, customers simply enter their user name and PIN which then triggers a unique security code to be texted to their mobile phone.
The security code remains valid for one minute; to complete the login customers enter the access code to verify their identity, which makes for a highly secure entry system.
Users were impressed by the simplicity of the system and, more importantly, were reassured by the improved security. By using something you know (your user name and PIN) and something you are given (your security access code), it is far more difficult for any potential fraudster to gain access to your account.
Amazingly this technology is available today and is being used in Switzerland. Knowing these findings, I am not surprised that the UK consumer is reluctant to bank online, but this mistrust is now costing banks billions by ensuring that their customers stay offline as a result of their fears over online banking security.
Every trip I make to my local branch or call I make to my telephone banking call centre costs the bank money. Money that could be saved if I could be persuaded to bank online. Perhaps the banks will begin to realise that earning customer trust could be good for their bank balances.
What do you think?
What security measures would encourage you to bank online? Tell us in an e-mail >> ComputerWeekly.com reserves the right to edit and publish answers on the website. Please state if your answer is not for publication.
Tim Pickard is RSA Security's strategic marketing director, EMEA. He is speaking in a seminar called “ Do I trust my Bank? ” at Infosecurity Europe, Olympia 29 April – 1 May www.infosec.co.uk
This was first published in April 2003