Banks Face Customer Exodus If Hacked

Financial providers must improve security or risk losing customers

(vnunet.com) September 21, 2005 -- A new survey by computer services giant EDS has shown that more than half of US banking customers would stop using their bank if it suffered a successful hacking attack.

Of the 1,424 people questioned in the Financial Services Privacy and Customer Relationship Management Survey 30 per cent would close all their accounts and take their business elsewhere if personal data was compromised.

Another 10 per cent would move some of their accounts, and 55 per cent would stop banking until they believed that the problem had been solved.

"The results of this survey accurately reflect a common theme we are seeing in the industry," said Jean-Louis Bravard, global leader at EDS Financial Services.

"The act of protecting consumers' personal information is not only imperative to meet compliance standards, but essential in a financial institution's ability to attract and retain a solid customer base.

"Financial providers must rise to the security challenges or risk losing their customers."

Respondents to the survey proved fiercely protective when it comes to their personal information, with 93 per cent indicating that they would not want their data shared with any third parties.

Over half stated that banks should not mine their data to build personal financial profiles, and nearly a quarter would object to getting advice based on those profiles.

Nearly 80 per cent of those surveyed used online banking and over 90 per cent said that they were confident in their bank being able to keep their data safe. The biggest fears were identity theft (81 per cent) and fraud (59 per cent).