NEWS Banks must compensate for their customers' lack of online security awareness if they want to attract more users for their internet services.
Two-fifths of the European internet users who don't use online banking say they are holding back because they worry about security, according to a survey of nearly 23,000 Europeans by Forrester Research.
And security fears don't just keep some consumers from signing up for online banking, said the analyst - they cause some existing online banking users to stop.
But despite these concerns many internet users don't take even basic security precautions, so banks must take measures to compensate for this, Forrester said.
"Banks should look to educate net users about security precautions, not let usability fears compromise security, deploy or strengthen two-factor authentication urgently, and collaborate rather than compete on security," it said.
The research found that many consumers think online banking is less safe than using a credit card in a restaurant. The majority of consumers in Germany, Spain, Italy, France, and the Netherlands were less concerned about paying by card in a restaurant than about using online banking.
Only 30 per cent of those interviewed were confident of the security of personal financial information such as credit and debit card numbers when used to make transactions online. Internet users who are confident of online security are four and a half times more likely to use online banking than those who are not, said Forrester.
Forrester senior financial services analyst Benjamin Ensor said: "Consumers' deep-seated security fears remain one of the biggest barriers to online banking use in Europe, particularly in countries like Italy, France, and the UK, where two-factor online banking authentication is rare or unknown. The more confidence net users have in security, the more likely they are to bank online."
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1. Jamie Bishop
UK Banks offering an online service are a joke and their licenses should be withdrawn until they sort their vulnerable software out.
They should be held liable for losses due to phishing, it's ridiculous that they are allowed to release such naive and poorly thought out software and hold their customers responsible for any losses!
It's time the British Govt did something to protect it's people from the old fashioned and disfunctional banking system which is hurting the British economy so much.
At least once the UK joins the Euro it will be easier for UK bank customers to shop around. Perhaps people in the UK will then question why their banking has been so innefficient and expensive too? Certainly it will become clear why the UK is known as "Treasure Island".