Survey: Banks Need to Better Educate Customers on Security Efforts

Customers are willing to switch banks if offered assurances on the security of their accounts and data, but nearly a third of customers think their bank doesn’t have a process for dealing with fraud cases, a new Infosys study found.

Banks need to do better communicate with customers about why and how they are collecting customer data, according to a new global consumer survey conducted by Infosys released yesterday.

Of the 5,000 consumers surveyed (including 1,000 from the U.S.) 89% said they are comfortable sharing personal data with their bank. The majority of respondents (87%) said they expect their bank to mine their personal data to protect them from fraudsters, and 83% even said they would switch banks if another institution promised to keep their money and data safer.

But the results showed that about a third of consumers don’t feel that their bank has a clearly defined process for addressing instances of fraud. The disparity between customers’ desire for security and their lack of knowledge about their banks’ security efforts comes down to communication, says Narayan Sivaram, a global client partner at Infosys. Consumers expect active communication from their banks through alerts and emails, Sivaram notes, and banks need to do a better job of educating their customers about their security efforts and what they need customers to do to keep their accounts secure.

Banks also need to be clear when collecting personal information from customers about the intended use of that information, Sivaram adds. While customers are willing to share information to protect their accounts and data, they are less willing to share personal information for other purposes. “Customers have mixed feelings about invasive techniques for analyzing customer data to provide customized experiences,” Sivaram relates.

This need to be careful about customer data also extends to sharing data with partner organizations, Sivaram advises. “For banks to share information with other organizations without customers having a say would leave them vulnerable to consumers’ expectation on data security,” he explains.

The survey also found that although nearly three quarters of the respondents want banks to send them mobile alerts, less than half (39%) said they were willing to share information on mobile devices. That percentage was much higher (56%) among consumers who “digitally active,” Sivaram says. But many consumers have not grown comfortable enough yet to share information through their mobile devices like they do through the online channel, he comments.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio