RealTime IT News

Report: ID Theft Haunting Bank Customers

Identity theft in the banking industry has become a growing concern in recent times, as a result of a number of high-profile breaches and consumer data theft.

A survey by consulting and systems integrator giant Unisys found that nearly 40 percent of Americans are somewhat willing to pay additional fees to keep their accounts secure compared to 27 percent in 2004.

The survey, which was part of a global study, saw a slight rise in the number of people, from 45 percent to 50 percent, who would consider switching to another bank for that security.

And 73 percent of Americans polled are worried about thieves using their bank account or credit cards.

The fears uncovered by the survey are warranted. In February, Bank of America admitted it had lost backup tapes containing account information on 1.2 million federal employees.

The heavily publicized leaks prompted a wave of government debate over the best means to protect consumer information, particularly through new legislation.

While the government and industry leaders tackle the issues at hand, consumers are voting with their pocketbooks.

"People are clearly worried, reinforced by the fact that they're even more willing than ever to leave their banks and pay for security protection," Dominick Cavuoto, Unisys corporate vice president and president of the global financial services practice, said in a statement.

"This consumer perception will likely drive banks to quickly adopt advanced security solutions or risk losing existing and potential costumers, revenue streams and brand reputation."

While 50 percent of U.S. consumers would like to receive more security information from their financial institutions, the study shows 42 percent have gotten information from their banks about the dangers of phishing attacks.

According to the Unisys survey, the U.S. leads the world in reported consumer ID fraud instances at 17 percent; the United Kingdom (11 percent) and Brazil (9 percent) follow.

Privacy concerns were also noted in a recent report by research firm Ponemon Institute and online privacy organization TRUSTe, which annually ranks the top 20 most-trusted companies for privacy in the U.S.

Officials noted that media coverage on security breaches could perhaps be attributed to a negative impact on the banking industry this year, with the industry as a whole slipping from third to seventh place in its trustworthiness rating.

Last year's trust survey found four banks -- Citibank, Bank of America, U.S. Bank and Washington Mutual -- on the top 20 list but only one made it to the 2005 rankings. Washington Mutual, ranked 20th in last year's study, actually rose in the ranks to No. 17.