BAI-BITS STUDY SHOWS CONSUMERS UNAWARE OF BANK PRIVACY AND SECURITY POLICIES

With the final date for Gramm-Leach-Bliley compliance just a few months away, many people still know little about their bank's privacy and security policies. Despite this lack of information, the phone and Internet survey of over 5,000 bank customers found that banks still ranked high in terms or trustworthiness.

With the final date for Gramm-Leach-Bliley compliance just a few months away, many people still know little about their bank's privacy and security policies, according to a BAI-BITS joint survey released at the recent Audit Compliance Electronic Security Conference in New Orleans.

Despite this information gap, the phone and Internet survey of more than 5,000 bank customers found that banks still ranked high on the trust curve. When it came to online transactions, banks rated highest in trust, outpacing the numbers compiled by large retail stores, supermarkets, and other entities that offer financial services over the Web.

"There are huge opportunities for us to tell people what's going on," said Cheryl Charles, senior director at BITS. "Gramm-Leach-Bliley presents an opportunity to partner with the public and work together."

The study, which measured how consumer attitudes on privacy and security influenced banking behavior, yielded other interesting results, especially when it came to gauging the effect of security concerns on Internet banking use. The survey found that although 6% of the 4,022 phone respondents have either experienced credit card fraud or, worse, identity theft, or knew other people who had, 60% of them reported using the Internet in the past year, averaging about 10 hours a week.

"They're concerned about security, but more than half are using the Internet," Charles said.

In addition to online crime victims, the study distinguished other classifications within the phone-in pool. At one end of the spectrum were respondents classified as "low tech" and "traditionalists," people with limited online exposure who still felt confident about financial institution security on the Web. At the other extreme were "leading edge" groups-people who went online daily. Within this classification, 86% reported using the Internet for transactions instead of for research. Transactions included booking travel, making purchases, online banking, buying or selling stocks, bonds or mutual funds, applying for a loan, buying insurance.

The leading edge expressed the most concern about Internet security-but this didn't stop them from using the Web for banking and other transactions. Of those that considered themselves sophisticated and security conscious, 100% reported using the Internet in the last year.

"They do the most active transactions, and the most to protect their privacy and the security of their information," said Charles.

The survey also included data from 1,033 who responded online. Not surprisingly, they were heavier Internet users and more likely to bank online. "They tended to be more educated but were similar demographically," said Charles. "I think it has to do with the pervasiveness of Internet access. The technology is there wherever you live."