Banks criticised over online security

Tuesday, October 25, 2016 - 10:09 by David Aiken

A new report from Which? has indicated that major banks in the UK are not doing enough to ensure that customers who use their online services are protected from the various security threats they face, according to the Guardian.

While financial institutions would be expected to offer even greater protection for users than retail sites which provide safe shopping online, the study found that big name firms, like Lloyds and Santander, were not able to score highly when assessed across a range of security-related criteria.

The biggest issue raised by analysts was that the worst performing banks were not providing a login process protected by two-factor authentication, meaning that it is much easier for cybercriminals to scam their way onto services and commit fraud.

There was a 64 per cent increase in the amount of money which banks lost to online fraud last year, with the total hitting £133.5 million. But part of the reason for this lax attitude amongst organisations in this industry is that this sum represents an infintissimally small amount when compared with the revenues they generate, so there is little incentive to make any changes.

In spite of this, Which? argues that it is essential for all banks to embrace the two-factor approach to authentication, rather than relying solely on a password-based protection system. This would involve customers being sent a secondary, unique code each time they want to log in, so that that their identity can more easily be verified.

Fewer than half of the banks examined currently offer this solution, while some campaigners believe that retailers should improve the resilience of safe shopping online by following suit. Consumers are being left out of pocket by online fraud on a regular basis and will continue to suffer unless action is taken.