Aussie banks divided over mobile security education

NAB specialist says banks need to do more to educate customers, Westpac says it is doing enough

Some of the big four banks are divided over claims by a National Australia Bank (NAB) fraud specialist that more needs to be done to educate customers about the risks of banking using mobile devices.

Speaking during a roundtable at the Banktech conference in Sydney this week, NAB head of fraud operations and investigations, Grant Baxter, said educating consumers was an "absolute challenge" for the bank because some customers did not understand the capabilities of their smartphone and their handset's level of security.

"Customers are oblivious because they think they are safe, and in our electronic fraud division we've seen a 300 per cent growth in iPhone fraud over the last nine months," he said. "That to me is something we need to step in front of and at the forefront that involves customer education," he said.

According to Baxter, the big four banks — NAB, Commonwealth Bank of Australia (CBA), Westpac and ANZ — are yet to do an effective job of talking to customers about smartphone fraud.

"I had a look at the big four banks websites and than looked at the Teachers' Credit Union of Australia. The most accurate and up-to-date information around the exposures customers face on smartphones was on the Teachers' Credit Union site. We really need to lift our game because we rely on the Australian Federal Police (AFP) and media programs such as Today Tonight to educate [consumers]."

A Westpac spokesperson said that the bank did not agree with Baxter's assessment that its website lacked information on smartphone security.

"Mobile banking security is paramount at Westpac and our mobile banking provides the same high level of security as online banking and business online banking," she said.

"Westpac continues to educate customers on mobile banking and security tips for customers can be found on the Westpac website."

A CBA spokesperson said the bank had not experienced "anywhere near" the 300 per cent increase in fraudulent iPhone transactions experienced by the NAB.

"Commonwealth Bank has state-of-the-art prevention and detection controls at the back-end," he said.

However he said the bank agreed that more up to date customer information regarding security of various banking channels was needed.

"We are currently in the process of our refreshing our comprehensive security centre on our website. Smartphone usage is, and continues to be, an evolving technology and our approach to customer education will reflect this," the spokesperson said.

Baxter also said that while NAB employs two staff to educate customers about smartphone fraud, it was not enough to cover all of its operations, which includes a network of 750 branches as well as kiosks and business banking centres.

"We also employ 25000 people working in contact centres so each of those people needs to be singing from the same song book when it comes to education. We do what we can around providing internal knowledge so a customer representative has access to that information but it's not consistent."

He added that the NAB does conduct targeted campaigns in areas such as Sydney but this was of no use to customers in other parts of NSW or the rest of Australia.

"If something comes up in terms of new fraud, we send customers a letter with my signature on the bottom or an internet banking message — that just doesn't cut it anymore," he said.

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Baxter said the bank was making an effort to educate its frontline staff about what advice they should be telling customers, but the penetration or retention rate was about 45 per cent for these staff. However, NAB also conducts baseline induction training which has helped education.

In order to assess individual customer risk, the NAB has started indicating to customers on its internet banking service how secure they are by using a score which shows the user's security as a percentage.

For example, if customers were at 20 per cent security they would be prompted to move up to 40 per cent security by adding SMS security or dual authentication.

AFP manager of the high tech investigations and business delivery unit, Commander Grant Edwards, agreed with Baxter's comments and also said that another problem in terms of education was community apathy.

"They [consumers] say `If we get ripped off, it's OK because the banks will cover it.' That's the Australian attitude of `she'll be right mate' and they understand the banks write the fraud option into the risk profile," he said.

"What we need to do is to get consumers to start thinking differently because not only are [fraudsters] taking money but they are also taking people's identity. When you put it in that context, it makes people sit back and think."

Edwards also said smartphone fraud education needed to be aimed at children who would be the next smartphone consumers and were accustomed to using online banking services. He added that groups such as the big four banks and the AFP may need to rethink how they targeted messages at Generation Y.

"We try to shove the traditional mum and dad messages at them, which is a red flag straight away."

ANZ has also been contacted by Computerworld Australia for comment.

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