Banks and other financial institutions spend billions of dollars on information and data security, mainly because they are such lucrative targets for cybercriminals.
Yet despite this spending and proactive defense, more than one-third of consumers say their personal bank accounts have been compromised. Almost 80% of financial institutions admit hackers have penetrated their defenses within the last two years.
These facts turned up in a new study by KMPG, which says banks can turn this negative into a positive.
"Financial institutions have a real opportunity to solidify trust with their customers by demonstrating that security is a strategic imperative, and that they are taking every possible precaution to protect consumers," said KMPG's Jitendra Sharma. "Consumers have a lot of options in this environment, so companies must get it right as the battle for customers is fierce."
Holding banks to a high standard
Indeed, consumers hold banks to a high standard. The survey showed that 37% said they would switch banks if their current financial institution did not cover their losses from a cyberattack. Nearly as many would leave if the bank didn't get out in front of the incident and acknowledge it in a timely manner.
In spite of the high-frequency attacks, the survey found the financial sector is the most proactive when it comes to defending against cyberattacks. About two-thirds of the financial sector executives polled for the study said their companies had invested in data security in the past year.
Not even the Federal Reserve has been exempt from cyberattack. A CNN report in June said the Fed has been under “constant” cyber-attack since at least 2011. The network listed at least 50 reported incidents it labeled as “unauthorized access” or “information disclosure.”
How consumers can help
The American Bankers Association (ABA), meanwhile, says there are steps consumers can take to make their banking transactions more secure. Its most basic tip is to create highly complicated and random passwords, avoiding pet names and other predictable combinations.
It says consumers should also monitor their accounts on a regular basis. Don't just do it when the monthly statement arrives.
Also, make sure computers and mobile devices are protected from viruses and malware. Don't give out your personal financial information in response to an unsolicited email, no matter how official it may seem. The ABA says your bank will never contact you by email asking for your password, PIN, or account information.