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A new ViewPoint from the TowerGroup Delivery Channels service underscores that when it comes to e-security, consumer perception is a bank’s reality.

Financial institutions must confront consumer e-security concerns head-on—and help consumers understand their critical role in protecting personal information—if mass adoption of Internet banking is to continue.

Highlights of the research include:

• Banks have been ahead of the curve in implementing Internet IT security measures against threats like hackers, viruses and network sabotage. Yet these aren’t the fraudulent activities that most concern consumers, who view them as attacks against the entire institution—not their individual assets.



• A TowerGroup review of the top 10 Internet banking sites found the majority made only poor attempts to communicate key points about Internet security, preventative measures and bank policies about security breaches.



• While most online banking sites tell consumers about security technologies like 128-bit Secure Socket Layer (SSL) encryption, this kind of technical data does little to communicate the broader measures in place to protect consumers, or the responsibilities a bank has if something goes wrong. And it does nothing to help consumers understand what they can do to keep personal information from inadvertently falling into the wrong hands.



• To better assure customers, banks must prominently address three key areas in plain, non-technical language: 1) the security measures in place to protect consumer data, and how those measures work; 2) the steps consumers must take to product their own personal information; and 3) a bank’s indemnification policy for any unauthorized activity.

“Online banking adoption has stalled because consumers are still concerned about security, despite the fact that e-security measures in place at most financial institutions are really very good,” said George Tubin, a senior analyst in the TowerGroup Delivery Channels service and author of the ViewPoint. “In order to gain the trust necessary for continued online banking adoption, banks must not only fully indemnify their customers from fraudulent activity – they must be significantly more assertive in educating consumers on how they’re protected.”

Tubin noted that few financial institutions today aggressively advertise the policies they have in place to protect customers from online fraud.

“Like most people, I’m not overly worried about having my credit card stolen because I know I’m not liable for fraudulent activity. But what if someone gets into my online bank account? The fact that the majority of consumers are uncertain about the answer to that question explains their continuing hesitation when it comes to online banking,” he said.