Is Online Security Important? You Can Bank On It

Carl Weinschenk

If somebody will use their computers to bank, they will do just about anything else online. For this reason, financial transactions serve as handy barometers not only to decision-makers in those industries, but to the entire e-commerce universe.


In that context, this Bank Systems & Technology story, which features results from the TriCipher Consumer Online Banking Study conducted by Javelin Strategy & Research, is significant. The bottom line is that identity protection that passes muster with consumers would greatly increase the number of people who bank online and broaden the online activities of those who already do so. This software must be offered for free, however.


While that's not surprising, the sheer numbers suggested by the survey -- which posed the questions to 3,349 U.S. adults -- is stunning. The firm says that 70 million people would change their online banking habits if the protection with which they are comfortable becomes available: Thirty-one million would start and 39 million would do more. This would translate to $8.3 billion annually in increased profitability.


The report doesn't mention mobile online banking. This form of banking, which is starting to gain momentum, certainly would make these numbers even more startling.


There is a wealth of information in the report. For instance, 41 percent of those surveyed would switch institutions or reduce activities if their banks were hit by a data breach. Researchers found that 62 percent of customers are interested in identity protection software. Among second factor authentication options, thirty-three percent support biometrics and 20 percent like the idea of one-time password tokens.


The results of the survey scream out loud and clear to any company -- not just banks -- that are interested in e-commerce: Invest in security. It's not enough that networks and transactions are considered safe statistically. Customers must be made to feel that they are safe. Of course, any extra layer of security is a good thing. What is important to recognize is that two-factor authentication also is good marketing.

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May 11, 2007 5:00 AM Seth Knox Seth Knox  says:
As a member of the TriCipher team behind the study, Id like to point out that the most popular form of authentication was not included in the original article by Bank Systems &Technology and , as a result, this blog. 53 % of respondents indicated that they preferred authentication software as their first choice for multifactor factor authentication, far more than biometrics (33%), one-time passwords (20%) or other multifactor authentication methods. This is even more significant because respondents actually logged into a simulated online bank with authentication software, and experienced it first-hand as part of the study. For the full results and definitions of each authentication method, please read the full TriCipher Consumer Online Banking Study: Reply
May 14, 2007 9:14 AM Carl Weinschenk Carl Weinschenk  says:
Thanks for the comment, Seth, and I'm glad the info now is complete. To reiterate my takeaway from the study, the original story and the blog, I think that financial institutions and any other company that deals with sensitive data on line really have to look at multi factor as equal (or nearly equal) parts pure security and marketing. Reply

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