Banks Could Increase Profitability With Stronger Security Measures

Mar 26, 2007 3:08 PM

Consumers would take advantage of more online banking services if banks provided stronger identity protection, suggests TriCipher, a Los Gatos, Calif.-based provider of authentication solutions to protect against fraud and identity theft.

TriCipher recently published a Consumer Online Banking Study, conducted by Javelin Strategy & Research, Pleasanton, Calif.

The study included 3,349 respondents from a random-sample panel that was representative of the U.S. population. Surprising findings uncovered that nearly one in five, estimated at 26 million, adult consumers have been victims of identity theft or fraud in their lives. In addition, according to survey results, more than 88 million online banking customers said they would switch banks, or reduce online banking usage, if news reports revealed that security at their individual institution was compromised.

The survey discovered that banks could dramatically increase their bottom line if they provided customers with identity protection software to securely log in to online banking websites. An expected 39 million online users would increase their online banking activity if their bank offered free identity protection software, and 31 million customers who do not presently bank online would feel safe enough to begin online banking if offered the software.

"Sixty-seven percent, or 150 million, U.S. consumers don't bank online today," says Stephen Knighten, Javelin Strategy & Research statistical analyst. "Our study results show that offering consumers strong online measures creates highly significant implications for the banks. We estimate that the industry could realize a gain of $8.3 billion per year through customer adoption and increased loyalty by offering strong identity protection software to their customers."

When asked if they would download identity protection software from their financial institution, 62 percent, or 102 million, consumers said they would be likely to do so. Consumers' willingness to download security software to protect financial information was further confirmed when 69 percent of respondents, or 113 million consumers, reported having downloaded some form of security software in the last six months.

"We're very excited by the survey results that prove that consumers want more innovative online banking features and that they're more than willing to take the extra security steps to get those features. With recent news of more sophisticated fraud and identity theft attacks, we believe that customers are comfortable downloading innovative software to increase access to financial information and banking functions," says John De Santis, TriCipher CEO.

After having downloaded, installed and logged into a simulated online banking website using identity protection software, an overwhelming four out of five respondents found the process easy and worth the effort for more security.

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© 2012 Penton Media Inc.

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