BANKS trying to grow their online banking community have their work cut out as online scams are shaking consumer confidence in Internet banking, according to a new survey by security specialist RSA.

Fifty-two per cent of the survey respondents said that they were less likely to sign up or use Internet banking due to online scams like phishing, RSA's latest Financial Institution Consumer Online Fraud Survey found. RSA is the security arm of enterprise storage giant EMC.

The online survey which is in its fourth year, was administered by US-based online market research firm Infosurv and involved 1,678 adult participants from eight countries. Respondents from Singapore numbered 208, or 12 per cent, while the other respondents were from the US, UK, Germany, France, Spain, Australia and India.

The survey also found that through the years, a growing number of respondents were less likely to respond to e-mail from their banks due to the prevalence of online scams like phishing. This year, some 82 per cent of respondents with bank accounts fell into this category, up from 79 per cent in 2005 and 20 per cent in 2004. At a local level, banks in Singapore seemed to be on the right track with their implementation of two-factor authentication (2FA) for online banking last year, as 96 per cent of local respondents felt that banks should use stronger authentication methods beyond the traditional 'username and password' methods, while 62 per cent wanted banks to improve phone banking authentication as well.

'We anticipate that 2007 will bring new steps forward in online banking security, albeit in the context of an evolving threat landscape that is driving the need for added protection in other remote channels - with a focus on telephone banking,' said Ross Wilson, managing director of RSA's operations in South Asia and India.

Globally, some 82 per cent of online account holders also want their banks to monitor their online and telephone banking sessions for irregular activities, just like they now monitor credit card transactions.

In a separate security survey commissioned by enterprise networking firm Juniper Networks which polled staff from 48 multinational companies in the Asia Pacific region, about half of the respondents admitted to writing down their security passwords. The report concluded that, in general, security awareness was still lacking in companies.

This article first appeared in BT on February 05, 2007