The Convenience of Online Banking – Mitigating the Effects of Online Banking Fraud
Do you remember the last time you drove to a bank to deposit a check or open an account? Neither do 62 percent of Americans who primarily use digital banking as a means to handle their finances, even opening accounts is done primarily online with 72 percent of consumers reporting they used digital channels to open a checking account in 2016. Online banking has certainly become an integral part of every-day life, and Americans are celebrating the convenience of this service on October 9 — National Online Banking Day.
The second Monday of October is recognized as National Online Banking Day to appreciate the convenience and the advantages of online banking. It has many benefits such as flexibility to choose where and when consumers can bank, as well as fast and convenient access to accounts. However, digitizing bank services can come at a price.
Increased Opportunities for Hackers to Commit Online Banking Fraud
With more financial information available online, hackers are more enticed to target the financial institutions storing that data and sell it online or exploit it themselves to commit online banking fraud. In fact, financial services firms are reportedly hit by cybersecurity incidents at staggering 300 times more frequently than businesses in other industries. The affects to institutions who are successfully breached can be significant. A typical malware attack on a financial business costs around $825,000 on average to resolve and the cost of Distributed Denial of Service attacks targeting online banking services specifically, skyrocket to an average of around $1.8 million! These staggering statistics emphasize that it’s never been more important than now for your institution to be vigilant about safeguarding data against hackers looking to commit online banking fraud.
Despite the rising prevalence of data breaches, consumers are likely to stop doing business with an organization who they believe allowed their data to be compromised. A 2017 survey of identity theft and fraud victims revealed that 33 percent of respondents closed existing financial accounts as result of identity theft. The potential business impact of a breach and record-breaking increase in the number of them underscores the need for organizations to take preventative measures to not only mitigate risk of falling victim to a breach but also mitigate the fall-out when, not if, they do fall victim. Your business can reduce these risks by staying current on emerging cybersecurity threats and data protection best practices, as well as by proactively offering resources to your customers that demonstrate your commitment to cybersecurity.
Mitigate the Effects of Fraud on Institutions and Consumers
October is a great time for financial institutions to evaluate cyber infrastructure and find resources to share with customers, as it’s National Cyber Security Awareness Month (NCSAM). Many public and private organizations, including ourselves, are working together to bring awareness to online security and the steps business and consumers can take to better protect against online banking fraud. The NCSAM has a library of educational resources available with best practices for your businesses and to share with your customers as well.
Financial institutions should consider offering a comprehensive identity protection and resolution service to their customers as well to further demonstrate their commitment to cybersecurity. With 58 percent of consumers reporting they are likely to purchase identity protection in the next 2 years and more than 50 percent of them looking to purchase it from their financial institution, identity protection is a value-added product your customers will be looking to your organization to purchase. And for even more information on how your institution can maximize profit and minimize cyber risk, download our white paper The Impact of Cybersecurity Incidents on Financial Institutions.