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Jonathan Camhi
Jonathan Camhi
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Data Security: Consumers Trust Banks Over Retailers

A new ACI and Aite Group survey found that the majority of consumers trust banks more than retailers to keep their data private and secure.

Last year’s retailer data breaches that exposed millions of card credentials focused public attention on the issue of cybercrime and data security. Fortunately for banks, the majority of consumers still trust financial institutions more than almost any other type of organization to protect their data, according to a new study by ACI Worldwide and Aite Group. The report, “Global Consumers: Concerned and Willing to Engage in the Battle Against Fraud,” found that 58% of the more than 6,100 consumers surveyed said they believe banks do a better job of safeguarding data than retailers, governments, or law enforcement agencies.

Retailers have little consumer trust when it comes to data security, the report found. Only 55% of the respondents said they think that the stores they frequent deploy security systems of any kind to prevent data breaches. Also, 29% of the respondents said they don’t trust retailers to protect their personal and financial data from criminals.

“Retailers have their work cut out for them to change consumer perception that shopping, be it online or in-store, is unsafe,” Mike Braatz, senior vice president of payments risk management solutions at ACI, said in announcement of the study’s results.

The study also found that consumers want to be involved in protecting their data from fraudsters, since 77% of the respondents said they want to be contacted about suspicious activity on their payment cards. Some 73% of those surveyed said they would prefer that their banks don’t post any transactions to their cards until they’ve responded to a fraud alert. Banks can use that as an opportunity to strengthen their customer relationships through better engagement and education that makes their customers feel safer with their bank, according to Aite Group analyst Shirley Inscoe.

“Consumers want to engage in the battle against fraud. Financial institutions must take a proactive role in not only engaging customers in fraud-alerting activities, but educating them on preventive measures to take to combat [fraud],” Inscoe noted.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio

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Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
7/29/2014 | 8:24:48 AM
Re: Is this good news?
Yes, in recent years, financial institutions have been required by law to disclose to customers if there was a breach. I'm sure in years past some breaches flew under the radar, but I don't think US-based banks can conceal breaches anymore.
Brook Zimmatore
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Brook Zimmatore,
User Rank: Apprentice
7/28/2014 | 5:47:15 PM
Re: Is this good news?
Let's say, no banks which have had to give the details of their breach. 
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
7/28/2014 | 1:25:54 PM
Re: Is this good news?
I was thinking in terms of a breach that was somewhat on the scale of the Target one. If a breach is quickly detected and the right monitoring and policies are in place, and the most important data is compartmentalized so it is secure from other networks and systems, then the breach can be managed and damage minimized. Target obviously didn't have that.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
7/28/2014 | 1:22:54 PM
Re: Is this good news?
So far, no banks have seen a large scale breach, similar to the Target attack. However, many banks have suffered smaller hacks over the years. Luckily, they detected the attacks quickly and notified customers. According to a list on Privacyrights.org, there have been around 200 financial services breaches since 2005 (not including card fraud, internal theft, misplaced devices and other forms of data loss).
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
7/28/2014 | 1:04:24 PM
Re: Is this good news?
It's only good news for banks as long as none of them suffer a data breach. If a bank were to get breached, I think it would be an even bigger story than the Target breach. People think their bank is supposed to protect them. I don't think retailers ever had that same level of trust. If one bank gets breached though, that trust could ruined.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
7/28/2014 | 1:02:07 PM
Re: Is this good news?
In Soviet Russia, computer hack you.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
7/25/2014 | 8:07:27 AM
Re: Is this good news?
And US consumers trust banks more than this guy too:

Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
7/25/2014 | 8:03:31 AM
Re: Is this good news?
Good question: "Consumers trust banks, but compared to what?"


I'm pretty sure they trust banks more than this guy:



LOL!
KBurger
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KBurger,
User Rank: Author
7/24/2014 | 4:26:54 PM
Is this good news?
I guess this reflects well (or at least OK) on banks, but I think it's really kind of damning with faint praise. Consumers trust banks, but compared to what? But I do think this also shows that security capabilities and a true commitment to protecting consumer data can be a way to differentiate and gain loyalty. Also, with more financial activity moving to non-bank competitors -- it will be interesting to see what happens when the inevitable breach with a non-bank payments or PFM company happens -- will that reflect well on banks, or will there be guilt by association?
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