However, this still relatively young application of internet technology does come with a wide array of security concerns that highlight the ethical and legal responsibilities facing these handlers of sensitive information.
With identify theft and hacking of open source network activities real threats in the internet age, it is increasingly important for online shoppers bankers to be aware of the risks and for online financial institutions to be armed to protect against them.
For the banking industry, which has gone to considerable lengths to continually upgrade security measures, this presents a demand which is simultaneously economic and ethical. Indeed, the transition of users from traditional to online banking methods will be a shift "resulting in considerable savings in operating costs for banks." (Sathye, 325) This highlights the nature of it risks for all companies, which must balance security concerns with the financial optimization often associated with such change.
Online banking, bill paying and shopping are all services which have gained considerable momentum within the last five years, as technological security measures have increasingly improved the ability of users to protect themselves against unwanted hacker intrusion. The speed and efficiency of online money exchange makes it advancements desirable in both business and personal application, the rise of which to total mainstream penetration is generally inexorable as this represents an evolution in convenience and ease-of-use.
Still, it remains the case today that even though use increases exponentially on an annual basis, "security concerns and lack of awareness about Internet banking and its benefits stand out as being the obstacles to the adoption of Internet banking" (Sathye, 324) There remain many who believe that online financial transaction is simply to great a risk of sensitive and personal information.
Research tends to suggest that this is largely a misconception though, and that the risks of traditional credit-based shopping or banking in terms of vulnerability to fraud and identity theft are simply higher due to the greater frequency of such crimes comparative to hacking. Moreover, as the internet has evolved to become a more integral and credible avenue through which to conduct meaningful and valuable professional and financial transactions, efforts to protect its users have become more commonplace in institutional contexts such as with the government. Standards passed by the Federal Financial Institutions Examination Council in 2001, and revised in 2005, required that all institutions availing online monetary services achieve by 2006 a user authentication process designed to afford greater protection against security breach risks. (CoC, 1) in the original 2001 Guidance, regulatory requirements "focused on risk management controls necessary to authenticate the identity of retail and commercial customers accessing Internet-based financial services." (CoC, 3) for users familiar with online financial transaction to this juncture, the changes may be evident, particularly in the common risk management instrument through which the online banking portal will confirm the identify of the device through which the transaction is being made. This provides an additional level of security against unwanted third party defrauding and access.
At this juncture, all major banks and established retail outlets offering online services are compliant. To this extent, "the security measures employed by most banks can never be completely safe, but in practice the number of fraud victims due to online banking is very small. This is probably due to the fact that a relatively small number of people use Internet banking compared with the total number of banking customers world wide." (Wikipedia, 1)
This is to denote that there is a clear connection between the legal parameters designed to control it behaviors and the resultant security fortitude of resultant systems. In the case of retail use or the implementation of financial transactions, perceptions of the internet as being particularly vulnerable to security breach and identity are being defied by a professional and legal posture which are increasingly prepared to face the risks of an open-source world.
CMU. 2003. Risk Management. Carnegie Mellon University: Software Engineering Institute. Online at http://www.sei.cmu.edu/risk/index.html
Comptroller of the Current, Administrator of National Banks (CoC). (2005). Authentication in an Internet Banking Environment. Federal Financial Institutions Examination Council. Online at .
Sathye, M. (1999). Adoption of Internet Banking by Australian Consumers: An Empirical Investigation. International Journal of Bank Marketing, 17(7), 324-334.
Stoneburner, G; Goguen, a. & Feringa, a. (2002). Risk Management Guide for Information Technology Systems. NIST 800-30.
Wikipedia. (2007). Online Banking. Wikimedia, Ltd. Inc. Online at < http://en.wikipedia.org/wiki/Online_banking>.