Distrust of online banking driven by privacy concerns

A new survey has found that over 70 per cent of people don't trust their banks and online banks fared the worse in people's eyes.

The survey, conducted by the Ponemon Institute on 679 people in the UK about their attitudes to banking, found that 71 per cent do not trust their banks. Among the main reasons cited for this lack of trust were poor privacy and insecure banking websites.

The research, commissioned by technology services company Unisys, pointed to a significant shift consumer sentiment to switch banks if better security was available. Studies carried out by the company in 2006 found that 47 per cent of UK consumers would switch banks for one offering better security.

The survey also found that banks need to work on their relationship with the customer to build trust. It found that 82 per cent of respondents said respect for customers was a key trust builder, with a bank's attitude to its clients as a major influencer when deciding which institution to bank with.

Attributes most cited for eroding trust were disrespectful attitudes, poor privacy, weak IT, such as websites, poor corporate governance and a lack of investment in the local community.

Online banks did worse than those on the high street in the survey. The two worst rated banks were both internet based with no branches on the high street.

Elton Birden, vice president of UK Financial Services at Unisys said that the security crisis affecting online banking was over but customer trust was in jeopardy if banks don't respond better.

"Banks must look beyond firewalls and data breaches and understand that consumers consider everything when deciding where to place their trust," said Birden. "The good news is that the U.K. public is no longer apathetic about security as we had found in 2005.

He said the bad news is customers are now angry and want much more from banks to keep their trust. "Financial institutions have not listened and do not seem empathetic to customer concerns."

Birden said that data breaches and other security issues have done much to erode the public's perceptions of financial institutions.

"Banks must take a hard look at changing views and address the growing negative perception of their industry, from both a trust and a security viewpoint," he said.

Rene Millman

Rene Millman is a freelance writer and broadcaster who covers cybersecurity, AI, IoT, and the cloud. He also works as a contributing analyst at GigaOm and has previously worked as an analyst for Gartner covering the infrastructure market. He has made numerous television appearances to give his views and expertise on technology trends and companies that affect and shape our lives. You can follow Rene Millman on Twitter.