Monday, May 22, 2006
Online Banking Growth Slows Over Privacy & Security Concerns
Lisa Phillips, eMarketer senior analyst, authored a recent report that indicated the growth in online banking was 3.1 percent in the Q4-2005. Web site security was a critical concern for consumers. They are interested in who financial institutions will be sharing confidential information with and that it is protected from hackers.
"Being able to trust a banking site is extremely important to customers, with more than 87 percent saying in an Ipsos Insight survey that they wanted assurance that the bank would not sell their personal information, and 83 percent wanted assurance that such data was protected from hackers," according to the report.
European institutions use more advanced methods of online authentication than most U.S. banks. Europe has nearly double (75 percent) the number of online banking users than U.S. banks (38 percent).
The FTC reports there were 130 data breaches reported in the U.S. in 2005. Are these issues being addressed? Jeff Patterson, BOL Guru, mentions in his weekly update ( May 12 – May 18, 2006) that there are six bills pending in Congress currently that address data protection. One of these even includes criminal penalties.
By this year end banks should have enhanced authentication procedures in place. This is "required" under FFIEC guidance. But the Aite Group conducted a survey using 21 of the top 50 U.S. banks, based on number of accounts, and found that many will lag. While 5 percent are done now, 57 percent of those will comply by the year end, 33 percent will comply in 2007 and 5 percent didn't plan to comply at all.
For more information on complying with Multi-Factor Authentication, check out the two programs available on CD in the Banker Store.
Lisa Phillips, eMarketer senior analyst, authored a recent report that indicated the growth in online banking was 3.1 percent in the Q4-2005. Web site security was a critical concern for consumers. They are interested in who financial institutions will be sharing confidential information with and that it is protected from hackers.
"Being able to trust a banking site is extremely important to customers, with more than 87 percent saying in an Ipsos Insight survey that they wanted assurance that the bank would not sell their personal information, and 83 percent wanted assurance that such data was protected from hackers," according to the report.
European institutions use more advanced methods of online authentication than most U.S. banks. Europe has nearly double (75 percent) the number of online banking users than U.S. banks (38 percent).
The FTC reports there were 130 data breaches reported in the U.S. in 2005. Are these issues being addressed? Jeff Patterson, BOL Guru, mentions in his weekly update ( May 12 – May 18, 2006) that there are six bills pending in Congress currently that address data protection. One of these even includes criminal penalties.
By this year end banks should have enhanced authentication procedures in place. This is "required" under FFIEC guidance. But the Aite Group conducted a survey using 21 of the top 50 U.S. banks, based on number of accounts, and found that many will lag. While 5 percent are done now, 57 percent of those will comply by the year end, 33 percent will comply in 2007 and 5 percent didn't plan to comply at all.
For more information on complying with Multi-Factor Authentication, check out the two programs available on CD in the Banker Store.
