What do consumers want from mobile banking?

August 18, 2016
/   Insights

In the last couple of years, mobile banking has grown from being a fairly niche channel adopted by only the tech-savvy to one of the most common ways for people all across the world...

UK prepares to launch new polymer £5 note

August 4, 2016
/   Insights

Britain will soon become the latest country to release polymer banknotes into circulation, joining nations such as Australia, New Zealand, Canada and Vietnam in the shift to plastic currency.

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

A recent study warned that retailers with bad security would lose 64 percent of potential customers if they suffered a data breach that exposed financial information such as card details.

Data breaches are bad for customer loyalty. So what?

The fact is that consumers are ready to place the blame for loss of data, hacks etc on merchants and won’t shop with them if there has been a breach.

What’s interesting is that consumers are not prepared to take control or responsibility. According to Gemalto’s report, 69 percent think it’s the organization’s responsibility to protect sensitive data, while just 31 percent think it could be down to them. It echoes a report from TSYS that showed while people blame a merchant for a breach, they expect their bank or card network to fix it – at no point do they appear to look at their actions.

Can this be right? Do customers really not think they need to ensure their data is protected? The data suggests the public are not pulling their weight.

The study found just over half (54 percent) of consumers use the same password for all or some of their online accounts. Just one in four use two-factor authentication to secure all of their social media accounts.

Consumers need to take personal responsibility for security. Education by financial institutions plays a big part but it’s two-way street as banks and retailers also need to do more.

It’s a particular concern in the online, card-not-present space, where the bulk of fraud is migrating following the advent of EMV chip card technology.

SplashData recently revealed that the number one password remains ‘123456’, followed closely by ‘password’. But even then, passwords are vulnerable – open to hacks and easily forgotten. Visa and MasterCard are now in the process of ditching their online password systems in favour of text message alerts, which will ultimately be phased out in favour of biometric authentication methods.

However systems like Verified by Visa and MasterCard SecureCode can only help if the merchant puts them in place and the poll suggests retailers may be falling short.

Only one in four said all of the online retail apps/websites they use require two-factor authentication to secure online transactions.

The report also suggests financial institutions are hardly setting a great example. For online and mobile banking, just 58 percent of the respondents said their banks use two-factor authentication to secure their services.

Some would argue it’s up to consumers to only use websites that offer this kind of authentication. It is worrying that consumers are prepared to input their credit card details into websites that don’t offer the top-grade security features. Others would say it’s the merchant’s fault and they need to do more for their consumers. It would certainly be in their interests in terms of customer loyalty. But in terms of pure financial losses – why bother if issuing banks are ignoring the merits of two-factor authentication?

In any event, multi-factor authentication is a key way to stop fraudsters and it’s not being used enough.

But multiple verification steps every time puts people off, which is why we also need to take a risk-based approach to authentication, applying dynamic rules to transactions to ensure the process is both secure and, importantly for consumers, seamless. Consumers are not very good at security (easy passwords) because they want things to be quick and simple. Better education can help, but really it’s up to merchants and banks to help drive this.



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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp