How secure is your bank account?

Javelin Strategy and Research conducted its 7th Annual Banking Identity Safety Scorecard; this study was titled “Prevention Falls Precipitously as Financial Institutions Struggle”.  The scorecard evaluated financial institutions (FIs) security by prevention, detection, and resolution.  They evaluated consumer account security at the top 25 financial institutions by deposit size.  Bank of America won Best in Class-Overall for the seventh consecutive year and “Best in Prevention”. Citibank and Navy FCU were both awarded “Best in Resolution”, and Huntington and U.S. Bank tied for” Best in Detection”.

Overall the financial institutions have not kept up with increased security demands in authentication. Fraud prevention has declined from 79 percent of the financial institutions meeting the criteria in 2009 to only 54 percent in 2011. Javelin made changes to the scorecard to keep up with the fraud demands, but the banks in general did not.

Use of SSNs

All of those evaluated used partial or full Social Security numbers (SSNs) to authenticate their customers via the phone, mail or Internet.  Their focus was not in authentication, but in browser security (40 percent) and partnering with security vendors (24 percent).

“FIs need to end their drug-like dependency on using full or truncated SSNs for authentication purposes,” said Phil Blank, Managing Director, Security, Risk, and Fraud at Javelin. “SSN has become a popular security question these days and is a commonly phished item by fraudsters. While a bank may think it is making a transaction more secure by asking for an SSN, it is actually compromising the value of this security question by continually asking for the same information. Consumers become comfortable with providing this highly personal information whenever asked. ”

Fraudsters are getting more sophisticated and Javelin forecasts that fraud will continue to increase during these economic times. How secure do you feel with your bank?  Have they implemented authentication that doesn’t use your Social Security number?  Have they asked for your Social Security number lately?

Credit Damage Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Auto Loans, Credit Cards, Credit Monitoring, Credit Report, Identity Theft, Money & Identity

This post was written by John Ulzheimer