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e-banking not as secure as it could be

Gridsure : 25 July, 2008  (Technical Article)
GrIDsure examines APACS report on online banking and identifies remaining areas of insecurity in terms of user authentication
Recent figures released by APACS seem to suggest that online banking is now a safe haven, but authentication expert GrIDsure argues that what lies beneath these figures paints a far more daunting picture.

"APACS tells us there's been a 505% increase in people using online banking in the past seven years, which is good news for banks, which really need cost-saving online operations to remain competitive," said Jonathan Craymer, chairman, GrIDsure.

"But our reading of the situation is that security concerns still prevent many from taking the plunge with online banking. Others may have started online banking and then stopped. It would be interesting to know what percentage of those responsible for the apparent increase fall into this category.

"It looks to us as though APACS is trying to persuade everyone it's now safe 'out there', while ignoring the fact that users' personal data and finances are still at risk from the use of fixed passwords and logon codes. APACS points to the fact that people have become more wary of phishing attacks, and as a result some types of fraud are much less successful now than they used to be, as savvy users become more aware of the risks. However 'hidden' threats - where the dangers may not be quite so obvious to those users - such as spyware, key-logging, shoulder-surfing and so-called 'spouse attacks', don't give customers the same freedom to steer away from danger. Online banking and shopping would be far more secure and convenient for the end user with the introduction of one-time PINs or passwords that do not require additional hardware."

APACS reported that total losses for online banking fraud for 2007 stood at £22.6million, a decrease of 33% from 2006. However, according to previous figures released by APACS earlier this year, Card Not Present (CNP) fraud, which includes phone, internet and mail order scams, now amounts to more than half of all card losses both in the UK and abroad at £291m.

"Another thought APACS should consider is whether the widespread introduction of broadband into UK homes has played a more significant role in the rise of online banking, rather than suggesting more are using it because it has become 'safer' in recent years," added Craymer.
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