Banks Risk Shattering Customer Trust with Lax Stance on Fraud

According to Gallup’s 2012 report, “Confidence in Banks,” consumer confidence in U.S. banks hit a record low of 21 percent last year. The percentage of Americans with a great deal or quite a lot of confidence remains at about half of the pre-recession level recorded in June 2007 of 41 percent.

“Banks are in a precarious reputational position with consumer confidence low, accountholder trust high and fraud attacks on the rise in the United States”

Surprisingly, despite confidence being low, U.S. adults overwhelmingly trust their preferred financial institution to protect all sensitive information that can be used fraudulently. According to a new Entersekt poll, 72 percent of U.S. adults believe their bank does everything it can to protect their online banking transactions. This survey was conducted online within the United States by Harris Interactive on behalf of Entersekt from May 14th – 16th, 2013 among 2,052 U.S. adults ages 18 and older.

“Banks are in a precarious reputational position with consumer confidence low, accountholder trust high and fraud attacks on the rise in the United States,” said Christiaan Brand, chief technology officer at Entersekt, an innovator in transaction authentication technology. “In that volatile an environment, one breach, one major hack, one news story on fraud can shatter a bank’s reputation, leading to an exodus of customers.”

According to the poll, 71 percent of Americans would be at least somewhat likely to switch banks if they became a victim of online banking fraud. On average, Americans bank online 10 times per month. Each login is an opportunity for hackers to steal personal information.

“Online and mobile banking are convenient, but hackers see it as fertile hunting ground for valuable information, even with hardware tokens, one-time passwords and image-based protections such as CAPTCHAs,” continued Brand. “Customers shouldn’t abandon these channels. They should simply take a more aggressive and active role in their protection.”

Almost six in ten (58%) Americans would be at least somewhat willing to take an active role in securing their online banking transactions if this meant using their mobile phone to authenticate activities, such as login, transfers and bill payment.

Entersekt helps banks and their customers authenticate online and mobile banking transactions by accepting or rejecting a transaction through a mobile phone. Specifically, the company’s product Transakt, which is available for hundreds of different mobile platforms, be it iOS, Blackberry, Android, Windows Phone or any other Java platform, verifies both the bank and the mobile device through electronic certificate technology. Since implementation, no banks using Transakt, have fallen victim to phishing attacks.

Even with heightened customer interaction, banks retain full control over registering users. All communication is encrypted end-to-end and cannot be intercepted by outside parties. As a result, Entersekt both protects customers and strengthens their bank relationship.

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