Feeds

Fear of fraud hampers UK online banking

FSA survey

Internet Security Threat Report 2014

The UK's Financial Services Authority (FSA) has warned banks that they must do more to help consumers to deal with online banking fraud, warning that consumer confidence in internet banking is currently very fragile.

According to the regulator’s Financial Risk Outlook 2006, to be published on Wednesday, half of active internet users are 'extremely' or 'very' concerned about the potential fraud risk of making an online transaction.

A survey carried out for the FSA by NMG Financial Services Consulting/IPSOS, shows that consumers who conduct their banking online are taking steps to protect themselves against fraud, by installing security software on their PC, but over a quarter do not know when they last updated their software or update it infrequently.

Five per cent of online bankers have no security software installed on their PC at all. The most common reasons cited include that it is too expensive, that they don't need it or they don't understand what it is.

Many banks' terms and conditions reflect the voluntary Banking Code. The current edition, published March 2005, tells users to use up-to-date anti-virus and spyware software and a personal firewall.

But the FSA found that nearly all users (95 per cent) surveyed believe that at least some security responsibility should lie with the bank while 45 per cent believe banks should take sole responsibility.

According to APACS, the UK payment association, fraud losses through internet banking were £14.5m in the six months to June 2005. Although this is relatively low, losses have more than trebled since the same period in 2004 (£4m). The FSA's research found that if banks were to tackle these losses by shifting the liability fully towards the consumer, more than three quarters (77 per cent) of users say they would abandon internet banking.

“Most consumers recognise they have some responsibility for security but they are not necessarily following this obligation through,” said Philip Robinson, Financial Crime Sector 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.”

"We recognise that many banks are already taking steps to engage consumers. Initiatives like the 'Get Safe Online' campaign between the Government and the private sector show consumer education is beginning to happen. But banks need to look carefully at consumer attitudes and whether their initiatives are effective in maintaining confidence," he added.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Choosing a cloud hosting partner with confidence

More from The Register

next story
Regin: The super-spyware the security industry has been silent about
NSA fingered as likely source of complex malware family
Privacy bods offer GOV SPY VICTIMS a FREE SPYWARE SNIFFER
Looks for gov malware that evades most antivirus
Patch NOW! Microsoft slings emergency bug fix at Windows admins
Vulnerability promotes lusers to domain overlords ... oops
HACKERS can DELETE SURVEILLANCE DVRS remotely – report
Hikvision devices wide open to hacking, claim securobods
'Regin': The 'New Stuxnet' spook-grade SOFTWARE WEAPON described
'A degree of technical competence rarely seen'
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
How to determine if cloud backup is right for your servers
Two key factors, technical feasibility and TCO economics, that backup and IT operations managers should consider when assessing cloud backup.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.