Work with customers to improve security, FSA tells online banks

The Financial Services Authority is urging banks to work with their online banking customers to fight fraud.

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.

Read more on Hackers and cybercrime prevention

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.