Cards on the table

A few thoughts on the UK credit card, debit card and online banking fraud figures released this week by The UK Cards Association. 

Fraud losses on UK debit and credit cards fell seven per cent in 2011 to £341 million, an 11-year low. This has understandably made a lot of headlines in the last couple of days. But little attention has been paid to the sizeable increase in cheque and telephone banking losses last year.

The reduction in card fraud can be attributed to such initiatives as MasterCard SecureCode, Verified by Visa and American Express SafeKey; continued upgrading of the chips on UK cards; and increased roll-out of chip and PIN abroad. All of which have made the fraudster's life that little bit more difficult and sent him/her off to other areas. Hence the increase in cheque and telephone banking losses.

Online banking fraud losses dropped 24 per cent from £46.6 million in 2010, to £35.4 million in 2011. Factors contributing to this fall include: customers better protecting their own computers with up-to-date anti-virus software; banks’ use of sophisticated fraud detection systems; and banks providing customers with additional software and hand-held devices to log on to internet banking. The press release I received notes that this decrease has occurred despite a continuing rise in phishing attacks and attacks involving malware. Phishing attacks were up 80 per cent from 2010.

The rise of phishing shouldn't come as a surprise. Whilst we should welcome the fall in online banking fraud, we should also remember the increasing sophistication of cybercriminals. For many of them, it's not about what was taken in 2011 or indeed what they can get their hands on this year. They're playing the long game, stockpiling with an eye on two or three years from now.

Your feedback please!

You have to hand it to first direct. At a time when many financial institutions are still umming and ahhing over social media, they have dived head first into the deep end.

The bank recently relaunched its customer website, www.firstdirect.com. It used its crowdsourcing venture, firstdirectLab, to gather the thoughts and opinions of the public on how the site could be improved. And post-launch, it has invited people to say how they have done on the design, layout and general feel.

So far, the new look site has received less than stellar customer reviews. At the last count, 849 people had left comments and there was an average rating of two stars (out of five). Feedback has included: 'This seems a backward step for FD. The site appears to have been design by an eleven year old!' and 'Horrid!! I can't see anything useful...hate black and white (have probs with sharp contrast - dyslexia eye condition (very common)...HATE IT!'

If I were a first direct customer, I would be thinking, it's great that these guys value my input and provide such good customer service. On the other hand, I can picture agitated members of senior management saying: "Gah! Why are we making it so easy for them to slag us off?" Ultimately, though, this makes the bank look transparent and streets ahead of its rivals. If it has to take a few hits along the way, then so be it. To quote Natalie Cowen, head of brand at first direct: "We wanted to create a space for our customers to take online banking beyond a purely transactional relationship and create more of a first direct community, in short, creating 'online banking with chemistry'."

Let's just hope this doesn't turn out to be a bold experiment halted after management get cold feet. 

Stupid, crazy and annoying

Yet more evidence of the power of social media. Disgruntled HSBC customers have been pouring onto Twitter to vent spleen about new handheld devices called 'secure keys' - these have been sent to its four million online bank customers.

HSBC says that the devices provide static and changing security information, ultimately making banking online a lot more secure. But customers have complained about the hassle of setting one up, the inconvenience of carrying it around with them and also that logging into their accounts now takes longer. On Twitter the device has been called ‘stupid’, ‘crazy’ and ‘annoying’, with some claiming they are now switching to other banks.

Twitter has spoken. IMHO, the extra layer of security should be welcomed but is this really the best way to go about it? The calculator does seem like a rather clunky device, out of place in the fast moving world of online banking.