The 2011 Business Banking Trust Study provides insights from the SMB perspective on the pervasiveness of fraud, the state of security at banks and businesses, and the impact fraud has on businesses’ relationships with their banks. 533 respondents from SMBs representing many industries and geographical locations across the United States participated in the February 2011 study, conducted by independent research firm Ponemon Institute <http://www.ponemon.org/> .
The survey data reveals that despite a year of increased public attention to the impact that corporate account takeover has had businesses and banks, the industry has barely moved the needle in addressing the problem. And unfortunately, financial institutions have everything to lose: their money and their customers. While businesses and institutions battle in courts over security and responsibility, and Washington debates legislation and regulation, money continues to be siphoned from accounts unnoticed at an alarming rate. SMBs are leaving their institutions when they are the victim of fraud, and with the quick adoption rates of online payments and remote access points, the situation is set to get worse.
Highlights include: Fraud Attack Rate: 56% of businesses reported experiencing payments fraud or attempted payments fraud in the last 12 months. 75% of businesses have experienced account takeover and fraud in the online channel. These rates are the same as they were in 2010, indicating banks and businesses are struggling to make progress on the issue. Fraud Detection Rate: In 78% of fraud cases, banks failed to catch fraud involving the illegal transfer of funds or other nefarious practices such as information identity theft. Mobile Banking: 38% of respondents said they access their company’s banking accounts from mobile devices including smart phones and tablet PCs like the iPad, compared to only 23% in 2010. Responsibility and Liability: 41% of respondents said that in their opinion, the bank would not cover any losses if their company’s bank assets were stolen and not recovered. This perception increased from 26% in 2010. Despite this increased awareness, 70% of businesses still feel that their institution should be ultimately responsible for securing online accounts. Customer Churn: 43% of businesses said they have moved their banking activities elsewhere after a fraud incident. 10%of businesses that have experienced fraud have terminated their banking relationship following fraud attacks, and additional 33% said they did not fully terminate their relationship, but moved their primary cash management services to another institution. The Guardian Analytics 2011 Business Banking Trust Study includes more details on SMBs’ online banking behavior and their views of banks’ security practices including accountability and end-user education practices. It also provides recommendations for banks and businesses to better prevent fraud.