Web shoppers demand “security” dividend from banks

Web shoppers who consider themselves more secure are beginning to demand better rates from banks as a reward, a survey by consumer research group YouGov has found. Almost half (44%) say that banks should reward them for being careful with their personal security online, and a third (33%) think that “security slackers” who are careless with passwords and card details should be penalised by banks.

While the majority of online shoppers (85%) perceive of themselves as taking sensible steps to protect themselves from online, only half of those interviewed said they had read the security advice provided to them by their bank. The research was commissioned by Fujitsu Services, the IT services company that built the pioneering internet banking service for First Direct.

Banks have historically offered universal fraud guarantees and protection to all customers, and although they give advice on personal security they are yet to offer any incentives for responsible customers. Online banking fraud costs UK banks ?12 million a year, according to Apacs, the non-statutory association of orgainsations who deliver consumer payment services. This figure is predicted to rise considerably over the coming years.

Keen to build consumer confidence in online shopping and financial services, banks and credit card companies have given strong guarantees on security and have effectively insured customers against fraud for free. Fujitsu believes that by taking further steps to encourage customers to be more responsible for their own security, banks could save money, improve service and improve the approach to risk management for online banking – at the same time providing a vital point of differentiation in the market.

“If you are buying house insurance you expect a better rate if you have taken precautions like fitting window locks or an alarm,” explains Ann Hosford, marketing manager, Financial Services business unit, Fujitsu Services. “But responsible web shoppers effectively carry the can for those who don’t take sensible steps to protect themselves from online fraud.”

At a time when competition in banking is fiercer than ever, banks must better tailor services to suit the needs of specific customer groups. Underpinning this, however, is a fundamental requirement to have a clear understanding of a customer’s financial circumstances, and their behaviour in terms of protecting and administering their finances. To achieve this, and allow for flexibility in service and product provision, there is a real need for banks to capture, analyse and distribute information so that they can better match service to need.

“Two factors – concerns about the cost of online fraud and a need to differentiate in this crowded market – mean that banks are likely to consider different services for customers based on whether they take sensible security precautions like updating virus software, keeping up a personal firewall and not using the same password for all of your accounts,” continues Hosford. “To do this banks will need to take a careful look at their ability to manage customer data in order to assess risk and devise new checking mechanisms to test a customer’s diligence against fraud.”

Fujitsu works with a varied base of financial orgainsiations to outsource the headache of managing customer data and provides inventive products and services that help banks better understand their customer base and adapt services accordingly.

You Gov

This research was conducted between 11 October and 13 October 2005. YouGov interviewed a sample of 2,551 individuals representative of all adults in Great Britain. The survey was carried out online.

About Fujitsu Services

Fujitsu Services is one of the leading IT services companies in Europe, Middle East and Africa. It has an annual turnover of ?1.99 billion, (€2.86 billion) employs 15,200 people and operates in over 20 countries. It designs, builds and operates IT systems and services for customers in the financial services, telecom, retail, utilities and government markets. Its core strength is the delivery of IT infrastructure management and outsourcing across desktop, networking and data centre environments, together with a full range of related services, from infrastructure consulting through integration and deployment.

Headquartered in London, Fujitsu Services is the European-centred IT services arm of the Fujitsu Group. The Fujitsu Group is a US$44.5 billion (€34 billion) leader in the provision of IT systems and services for the global marketplace.