The findings revealed a high rate of consumer anxiety over the potential fraud risks of online transactions and prompted the FSA’s appeal to banks to better educate their customers about online fraud and the measures they can take to reduce the risks.
According to APACs, the UK Payment Association, fraud losses through internet banking were GBP14.5 million in the six months to June 2005, a figure that has trebled since the same period in 2004.
According to the FSA, nearly all users surveyed believe that at least some security responsibility should lie with the bank, while 45% believe banks should take sole responsibility. The FSA’s research also revealed that if banks were to tackle fraud losses by shifting the liability fully towards the consumer, more than three quarters of users would abandon internet banking.
Philip Robinson, financial crime sector leader at the FSA, said, If consumers were asked to foot the bill for internet banking fraud losses, our research shows that they would stop using the tool. Most consumers recognize they have some responsibility for security but they are not necessarily following this obligation through. To tackle the losses associated with fraud, banks should continue to drive security and this must include educating consumers on the importance of protecting themselves.
The FSA cited two-factor authentication as one security measure that many banks have implemented in a bid to reduce risk. If the FSA’s warnings are heeded, it seems likely that this, and additional security measures, will be more widely deployed across UK banks.
