The Co-operative Financial Services (CFS) is the name for the group of businesses that includes The Co-operative Insurance (a division offering pensions, unit trusts and insurance as well as financial advice), The Co-operative Investments and The Co-operative Bank (including smile). The latter provides High Street and Internet banking, current accounts, mortgages, credit cards and loans.
Part of The Co-operative Group – the UK’s largest consumer co-operative – CFS boasts 6.5 million customers, and is the market leader for online banking in the UK. It has decided to launch this latest security programme in April. As a result, 300,000 branded Xi-Sign 4000 card readers – and associated services – will fully equip online banking users for safe transactions.
Home Chip and PIN ‘pass numbers’
To comply with CFS’ environmental policy, Xi-Sign’s developer Xiring has developed a dedicated environmentally-friendly packaging for Xi-Sign 4000.
Home Chip and PIN security solutions consist of providing a personal card reader to end users that’s then employed alongside their Chip and PIN banking card. The operating mode is simple: users insert their banking card into the reader and type in their PIN on the reader keypad. The card is then validated by the card chip that generates a dynamic one-time ‘pass number’ displayed on the reader LCD. The user then types the dynamic ‘pass number’ into the web site to confirm the transaction.
More secure online banking
“Xiring has been the perfect partner to support our programme, and enable the fast deployment we were looking for,” said Tony Britten, the director of financial crime management at CFS. “Being able to bank online with us has always been quick, easy and convenient. Now, though, we’re making it even more secure by introducing these Chip and PIN card readers.”
Created in 1998, Xiring is a security solution provider and develops security software embedded in smart card readers for strong authentication and digital signature. XIRING equips over six million users with remote card authentication solutions based on the banking card, and is the leader of the professional solutions market for the SESAM-Vitale French healthcare scheme.
The company posted revenues of euro 23.8 million in 2007.
Twelve retail bank brands supported
Speaking about the new security programme, Herve Bayle – director of the Banking Business Unit at Xiring – told SMT Online: “We’re particularly happy with this new programme launch in the UK, and proud to be supporting CFS with what is a tailored, global solution. This confirms the clear leadership of the Home Chip and PIN solution in the UK to secure online banking services. With CFS, Xiring is now supporting twelve retail bank brands programmes in the UK.”
Security threat has increased
Following the recent release of figures from APACS regarding the rise in online banking fraud, Xiring has also issued its own findings having carried out a survey of UK online banking customers.
The survey suggests that 62% of UK adults who bank online believe the security threat has increased since they signed up to the service. Yet when asked what would make them feel most confident of improved security, 21% responded that being asked an extra security question would be the best option.
This finding highlights the extent to which online banking users still need to be educated on the fallibility of static passwords, and how to better protect themselves when conducting their e-banking activities.
According to recent figures from APACS, online banking fraud rose 185% during the six months to June 2008 compared to the same period last year, and was largely attributed to criminals targeting online banking customers through phishing and spyware scams. Answering an extra security question does not, however, protect against these types of attack.
No perceived threat of identity theft
While 54% of people questioned admitted they were aware of the scare stories about e-banking at the time of signing up for the service, they were convinced that their bank would fully secure their online banking facility. What’s more, 12% admitted that they “didn’t consider there to be a security or identity theft threat” at all at the time of signing up.
Yet, while people believe security has become more of a problem, with nearly a third (31%) having either been a victim of online fraud themselves or through a family member, only 10% say that this experience has affected their online banking habits. Although, surprisingly, it seems that the young are more affected than the older generation with 33% of 18-25 year olds saying it has affected the frequency with which they bank online, while 46-55 year olds claim to be completely unaffected.
To enhance their security, 32% would feel most confident using a smart card reader to add an extra layer of security to their online banking, compared to only 5% wanting to use their mobile phone.
Online banking does, however, have a better image than e-commerce, with 74% believing that online shopping is less secure than online banking. If people have been a victim of fraud when shopping online or know a family member who has, it’s more likely to affect their e-commerce habits with 22% admitting that it has affected the frequency with which they shop online (compared to only 10% for e-banking).
Main findings from the survey
– Women are more trustworthy of their banks than men, it seems, with 59% believing their bank would protect them from online banking fraud at the time of signing up compared to just 48% of males
– Age-wise, the 46-55 age bracket is most trustworthy with 62% believing their bank would protect them, compared to only 46% of 18 to 25-year-olds.
– Similarly, young people are more likely to be put off shopping online having been a victim of fraud, with 33% of 18 to 25-year-olds saying it has affected the frequency with which they shop online compared to only 12% of 46 through to 55-year-olds.
– 84% think their bank should have ultimate responsibility for online banking security (rather than users taking personal responsibility). 40% said they would bank and shop online more if they felt more secure, although 46% of women agreed compared to only 34% of men.
Assessing the survey’s findings, Laurent Maitre – marketing director at Xiring – stated: “It’s heartening to know that UK e-banking users are aware of the security risks involved with banking online. However, it’s worrying that a good proportion of users think that by answering an extra personal question, it will improve their security and protect them against phishing attacks.”
Maitre concluded: “With attacks clearly on the rise, it’s essential that all online banking users look to add an extra layer of security to their online transactions through a dynamic password solution. We’re happy to see that the preferred way is Home Chip and PIN, thus confirming the choice of several major financial groups in the UK.”
The survey, undertaken by Vanson Bourne, questioned 500 adults in the UK during last September and October 2008. All of those questioned regularly (in other words, at least once a month) bank online.