Nearly a third of UK consumers are now banking online, ten years after the internet services were first offered.
The increase in uptake of faster broadband internet connections at work and at home, as well as greater wireless and mobile internet access, has seen the numbers of people using online banking increase five-fold in the last six years.
Today, more than 80 million use it to manage their bank accounts and pay bills online. But the lower transaction costs enjoyed by banks offering electronic services has been offset by the migration of financial fraud online.
In March this year, payments association Apacs said fraud targeting online and card-not-present transactions was up 44% last year, costing the UK financial services industry £33 million.
While experts have predicted that within a decade two-thirds of the UK population will bank online, they urged the efficient use of anti-spyware and virus software and firewalls as the best protection for users along with sensible password management.
The industry itself is under pressure to do more to protect this growing channel, as a survey earlier this year found half of 52 senior fraud experts felt technology held the key to providing increased internal and consumer security around online fraud. Both the police and House of Lords have also contributed to the debate around the online security threat, calling for greater cooperation and controls on industry technology practices.
Recently a number of UK banks including Barclaycard and the Royal Bank of Scotland (RBS) have launched schemes to provide handheld chip and PIN readers to online banking customers to generate unique passcodes at home with their credit or debit cards for completing particularly sensitive online transactions, like setting up a new account, transferring funds or creating a direct debit – all favourite means for hackers to loot bank accounts of unsuspecting users.