Online security tops banking customers’ demands 

By Glenn Wheeler

Consumers may not want to abandon their online banking activities, but many would consider abandoning their current financial institution in the wake of an online security breach.   

When it comes to online banking, security trumps speed and convenience for most U.S. consumers, according to a recent survey commissioned by management and technology consulting firm Booz Allen Hamilton.  

Zogby Interactive polled 2,160 U.S. adults in July 2011 about their concerns and expectations surrounding security in the banking industry. The results show most consumers believe the security of their electronic banking transactions and financial data is the most important service a bank can offer.

In fact, 71 percent of respondents said a bank’s top priority should be online banking security, and 78 percent said they would be willing to sacrifice some convenience and provide additional authentication online (in addition to a password) if the process enhanced security. Furthermore, 66 percent of survey respondents said banks, not the government, are most responsible for securing customers’ financial assets online.

In the wake of an online security breach involving their bank, 42 percent of survey participants said they would be “likely” or “very likely” to switch banks. In addition, news of recent cyber attacks in the financial services industry is starting to work its way into banking customers’ behavior. Twenty-one percent of those polled indicated such news has caused them to change the way they access their bank and retirement accounts and interact with their financial institutions. Respondents between the ages of 35 and 69 are nearly three times as likely to have changed their behavior as those between the ages of 18 and 34.

“Banking and investment institutions face attempted attacks every day from persistent cyber hackers, and the ability to prevent intrusions and immediately respond to any successful attack is critical for the stability of financial institutions,” said Bill Wansley, senior vice president of Booz Allen Hamilton. “Additionally, the use of mobile devices for banking (20 percent of survey respondents said they have used a mobile device to access a bank or retirement account in the last month) … is growing, and the uncertainty of security issues related to mobile devices is another driving factor in the need for institutions to rethink and update their approach to data security.”

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With consumers identifying security as a primary concern – giving it more importance than speed or convenience and warning it could even drive them away from their current bank if a breach occurred – how can financial institutions assure their customers they are safe when it comes to online and mobile banking?   

Addressing this challenge requires a cross-functional strategy. Some institutions may need to shore up their infrastructure, while others may need to educate customers or address misperceptions that could exist among customers. Widely publicized security breaches may cause unnecessary worry among customers who are unaware of their own financial institution’s stringent—and proven—security measures. For some financial institutions, making adjustments to protect customers’ sensitive information without placing unnecessary constraints on their budgets, such as requiring additional authentication at customer sign-on, may be key to enhancing the customer experience and the bank’s reputation. For others, simply reminding customers of the extensive security measures already in place may go a long way in reassuring online banking users that protecting personal information is the institution’s No. 1 priority.

To learn more about Viewpointe’s services, contact us at info@viewpointe.com.  

About the Author 

Glenn Wheeler is President, Viewpointe Clearing, Settlement & Association Services. He has extensive banking experience.