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7th Annual Banking Identity Safety Scorecard: Prevention Falls Precipitously as FIs Struggle to Stay Ahead of Fraud
Javelin Strategy & Research, Nov 2011, Pages: 62
Javelin’s Seventh Annual Banking Identity Safety Scorecard evaluated the top 25 FIs by deposit size based on their consumerfacing security features. FIs were scored according to Javelin’s Protection, Detection, and Resolution Model. Each year criteria scored are more rigorously evaluated in order to account for the increasing sophistication of fraud attacks. The purpose of this report is to provide an understanding of the current trends in fraud and the evolving security criteria that FIs are adopting to address them.
Primary Questions
- What are existing criminal trends and how can FIs mitigate them?
- Which banks provide the most complete mobile banking offerings?
- Where are FIs most vulnerable?
- Which FIs have the best consumer-facing prevention, detection, and resolution capabilities?
- Which practices have been commonly adopted by FIs, and which should be adopted?
- How have FIs changed their consumer-facing practices since 2010?
Methodology: Consumer
Consumer data in this report is based on information gathered from several Javelin surveys conducted in 2010 and 2011. Data was gathered and weighted to reflect a representative sample of the general U.S. population.
A random-sample panel of 5,102 respondents in a March 2011 online survey. The margin of error is ±1.37 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments. For longitudinal comparison, data from 2009 and 2010 was re-weighted to the latest census targets according to the U.S. Census Current Population Survey (CPS).
A random-sample panel of 3,180 respondents in a June 2011 online survey. The margin of sampling error is ±1.74 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments.
A random-sample panel of 2,304 respondents in an August 2011 online survey. The margin of sampling error is ±2.04 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments.
A random-sample panel of 4,998 respondents in a September 2010 online survey. The margin of sampling error is ±1.39 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments.
A random-sample panel of 5,004 respondents in a November 2010 telephone survey. The margin of sampling error is ±1.39 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments.
A random-sample panel of 4,784 respondents in a November 2009 telephone survey. The margin of sampling error is ±1.4 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments.
A random-sample panel of 5,075 respondents in a November 2008 telephone survey. The margin of sampling error is ±1.4 percentage points at the 95% confidence level. The margin of error is higher for questions answered by subsegments.
Methodology: Scorecard
From September 2011 to October 2011, Javelin conducted a survey evaluating the consumer-facing protective features of the top 25 banks and credit unions by deposit size.1 FIs without a significant branch system in the U.S. and FIs that did not have demand deposit accounts (DDA) were not included in this evaluation. Private FIs were also excluded. For foreign banks that were among the top 25 banks by deposit size, the U.S. commercial bank subsidiary was evaluated.
The criteria evaluated were categorized according to Javelin’s Protection, Detection, and Resolution Model. Criteria were weighted differently in order to emphasize Javelin’s commitment to the importance of particular features. Prevention was the most heavily weighted category, accounting for 45 of the 100 points possible, followed by detection (35 points) and resolution (20 points). FI scores were totaled for each category, revealing the highest-scoring FI for each group. The categories were then aggregated for each FI to reveal the top scorers overall.
Because scores were based on consumer-facing security measures, the scope of this report is limited to information provided on FI websites and supplied by customer service representatives (CSRs). For CSR calls, a mystery-shopper approach was used with an average of 9.8 calls made to each vendor. If researchers had any reason to doubt the information provided by a CSR, the call was terminated without adding to the average number of calls. The criteria used to evaluate these security measures are not intended to encompass all consumer-facing security measures, nor does Javelin claim to evaluate FIs on back-end security practices.
Given that the FIs surveyed changed from the past year and that the criteria used to evaluate the FIs tighten each year, direct year-to-year comparisons cannot be made. However, general trends in FI security adoption can be discerned, even though the data is not perfectly longitudinal.
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