EDS: Banks should shape up on security

If they don't improve protection, they risk losing customers aware of online-banking threats.

Banks must improve security practices or risk losing some customers, IT services company EDS said this week.

The remarks follow a survey conducted for the company finding that almost a third of North American consumers would close all accounts and move to another bank if their personal data were compromised.

Another 10 percent of respondents said they would move just some accounts to another bank, and 55 percent said they would stop banking until the crisis were resolved.

"The results of this survey accurately reflect a common theme we are seeing in the industry," Jean-Louis Bravard, global leader of financial services at EDS, said in a statement Monday. The survey results were published that day.

"The act of protecting consumers' personal information is not only imperative to meet compliance standards but is essential in a financial institution's ability to attract and retain a solid customer base," he added. "Financial providers must rise to security challenges, or they risk losing their customers."

The survey of 1,424 people in North America, conducted by Ipsos Reid, found consumers recognized several risks associated with online banking. These included identity theft (81 percent), fraud (59 percent) and insufficient encryption of sensitive data (48 percent).

When asked what banks should do to improve security, 83 percent of respondents said they should obtain permission before releasing customer information to third-party companies.

Eighty percent of consumers cited convenience as the primary reason for online banking.

Dan Ilett of Silicon.com reported from London.

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