Banks 'must raise their game on security'

Shape up or lose customers, says EDS; most users think banks should start by not giving customers' details away without permission

Banks must improve security practices or risk losing their customers, IT services company EDS has said.

The remarks follow a survey conducted for the firm, which found almost a third (30 percent) of consumers would close all accounts and move to another bank if their personal data was compromised.

A further 10 percent said they would close some accounts and use another bank if this happened, and 55 percent said they would stop banking until the crisis was resolved.

In a press statement, Jean-Louis Bravard, EDS financial services global leader, said: "The results of this survey accurately reflect a common theme we are seeing in the industry.

"The act of protecting consumers' personal information is not only imperative to meet compliance standards but is essential in a financial institution's ability to attract and retain a solid customer base. Financial providers must rise to security challenges or they risk losing their customers."

The survey of 1,424 people in north America, conducted by Ipsos Reid, found consumers recognised several risks associated with online banking, such as identity theft (81 percent), fraud (59 percent) and insufficient encryption of sensitive data (48 percent).

When asked what banks should do to improve security, 83 percent said they should obtain permission before releasing customer information to third-party companies.

Eighty percent of consumers cited convenience as the primary reason for online banking.