Trust versus security a paradox of online banking

Tighter security measures for online banking do not necessarily improve customers' sense of security, according to research by New Zealand's Massey University. If anything, the more identity-checking steps are imposed before a customer can get down to business, the less trusting they feel.

Information Sciences researcher Kansi Zhang investigated whether increasing identity-checking steps preceding a transaction would affect customers' sense of trust and security. His experiment involved four mock registration pages similar to those used for actual online banking transactions. The first required participants to complete only two identity-checking steps, with the other three requiring four, six, and eight steps.

Usability/user-friendliness is key to ensure online customers feel their funds are safe, says the study's co-author Dr Hokyoung Ryu, from Massey's Centre for Mobile Computing. "People struggle to recall a baffling array of pin numbers, passwords and personalised questions," Ryu says. "They resented the time these steps took in order to carry out a simple transaction."

Most New Zealand banks require two security steps to access an account online, Rya adds; banks in China, Japan, and Korea commonly demand up to eight security steps: "In our systematic search on many online-banking systems across the world, the West seems to have less log-on steps (2-4) compared to the East (e.g., China, Korea, Japan) have more log-on steps (5-8). We are not yet sure of whether there is any cultural difference in the standardisation, which will be further researched."

Ryu avers that that bank customers are likely to switch banks if they find their online security measures too onerous: "Designers of online-banking systems seem obsessed about making their systems more secure with more log-in steps (to avoid intercepting the identity of the customer), but the customers see this process highly unnecessary."

Image: People struggle to recall a baffling array of pin numbers, passwords and personalised questions, says a study from New Zealand's Massey University

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