by Sarah D. Scalet

What Banks Tell Online Customers About Their Security

May 29, 200710 mins

Six months after the FFIEC's rules for strong authentication took effect, we test what the country's three biggest banks tell their customers about online security.

By the end of 2006, U.S. banks were supposed to have implemented “strong authentication” for online banking—in other words, they needed to put something besides a user name and password in between any old Internet user and all the money in a customer’s banking account.

The most obvious way to meet the guidance, issued by the U.S. Federal Financial Institutions Examination Council (FFIEC), would have been to issue one-time password devices or set up another form of two-factor authentication. But last summer, when I did a preliminary evaluation of security offerings at the country’s largest banks, I was pretty unimpressed. (See Two-Factor Too Scarce at Consumer Banks.)

Since then, I’ve given up on getting a one-time-password device, and have accepted the fact that banks are instead moving toward what might diplomatically be called “creative” authentication. (See Strong Authentication: Success Factors.) Given that man-in-the-middle attacks can circumvent two-factor authentication, a combination of device authentication, additional security questions and extra fraud controls doesn’t seem like a bad approach.

But, I wondered, almost six months past the FFIEC deadline, what are banks telling customers about online security? As the chief financial officer of Chateau Scalet—and as a working mother about to have baby No. 2—I wanted to know if any of them could offer me enough assurance that I would take the online banking plunge as a way to simplify my life. I decided it was time to update my research from last year.

I called the call centers at each of the top three banks, identified myself as a customer with a checking and savings account, and told them I was interested in online banking but concerned about security. The point, yes, was to see what type of security each bank had in place. More than that, however, I wanted to see how well each bank was able to communicate about security through its call center. After all, what good is good security if you can’t explain it to your customers? Here’s what I learned. Citibank

My first call was to Citibank. I started with my standard question: “How can I be assured that my online banking transactions are secure and private?” The call center rep said that Citibank uses 128-bit encryption, which “verifies that you have a maximum level of security.” End of answer. Pause. I asked what kinds of protections Citibank had in place for making sure that it would really be me logging onto my account. “I’m sorry,” he said, “but I don’t understand your question.”

We had a language barrier, he and I. The call-center rep, in India, was not a native English speaker. The call went poorly, and I have no way of knowing whether this was because of our communications barrier or simply because Citibank hadn’t instructed him how to answer questions about security. I repeated my question a couple times, and he finally said, “Let me look into that, ma’am.” I waited on hold more than a minute, and when he came back, he told me I could go online and read all about online banking. “All the information is there, ma’am,” he said politely.

I kept prodding. I asked if Citibank offered tokens or did device recognition of some sort, and he told me I could log on with a user name and password.

“At any computer where I punch in my user name and password, I’ll have full access to my account?” I asked.

“Yes, ma’am, anyplace you have Internet access,” he answered. He finally did say that in certain situations I would be asked extra security questions, but he wouldn’t or couldn’t explain when that happened or why. I asked if it was unusual for him to field calls about security, and he said yes. I finally ended the call in frustration.


Next I called Chase. This time I got a woman in Michigan, who at least didn’t try to shunt me off onto the Internet—well, at least right away. But she seemed to interpret my every question about security as one about how, precisely, I could sign up for online banking. In fact, the first thing she did was congratulate me on being interested in the service.

When I asked how I could be assured that my transactions would be secure and private, she said that when I signed up, I would select a user name and password. “Once you’re enrolled, as long as you’re not giving out your user ID and password, you should be safe,” she said. At least she said should and not will.

Then I asked if Chase would do any authentication beyond user name and password, like identifying my computer or giving me a one-time password device. She seemed to think that I was worried about the log-on process being burdensome or confusing—and proceeded to make the process even more burdensome and confusing, with a convoluted answer about speeding up the telephone verification process. At one point, she had me so utterly baffled that she asked, “Are you O.K.?”

One thing I did manage to glean—I think—is that there would be some kind of activation code involved if tried to log on at a library or a friend’s house. Her explanation: “It’s called an activation code because it’s like a reset,” she said. “That is for security purposes.” She said this code could be sent by e-mail or text message, or that I could call in to get it. But she wouldn’t or couldn’t explain its purpose.

It wasn’t until 10 minutes into the call that she mentioned that I might have to answer extra security questions on occasion, and again, she couldn’t or didn’t explain what these questions were for, or even reassure me that the measures were there to protect me. When I asked what would happen if someone else transferred money out of my account, she said, “That’s not going to happen, ma’am, unless you give that information out to somebody.” Then she warned me to be careful about giving out my information—to merchants, of all places.

Credit her with being a diligent salesperson, though. Throughout the process, she kept trying to get me to establish an online account, right then and there, so that the first time I went onto, all I’d need would be that precious user name and password.

Bank of America

My call with Bank of America also got off to a rocky start. I wanted to record all three phone calls. (Why not? The banks do it for “quality assurance purposes”.) Both the Citibank and Chase representatives agreed to this without hesitation. The Bank of America rep, however, put me on hold for more than seven minutes, before coming back and saying I couldn’t record the call—something something the bank only records calls for training purposes something something. Oh well. It didn’t seem worth arguing.

Things got better after that. When I asked how I could be assured that my online transactions would be private and secure, the call center rep seemed to understand exactly what I was asking. First, she said that I should look for the lock at the bottom of my browser window, indicating a secure site, and noted that the encryption that Bank of America uses is “one of the highest.” (Neither of these are perfect indicators of security, of course, but it’s a logical place to start the conversation.) Then, she told me that, usually, the only time my account wouldn’t be secure is if I gave out my user name and password, or “answered a spam e-mail” where I clicked a link and entered my user name and password. This made her the only rep to actually warn about phishing attacks; she gets extra points for not using the silly term phishing.

Next, she launched into a very plain-English description of SiteKey, Bank of America’s system of allowing customers to verify that they are at the valid website by selecting a picture that will come up each time they log on. “If you don’t see the picture, don’t enter your password,” she told me. She also explained that when I signed up for the first time, I’d have to answer three extra security questions. If I (or anyone else) ever tried to access my account from a different computer, I would first be asked a security question. If I answered correctly, I’d see my security picture and then be asked for my user name and password. If I answered it incorrectly a certain number of times, I would be locked out and have to go through extra verification at the call center to have the account unlocked.

Overall, I was impressed at how comfortable she was talking about security. It seemed to be part of the training she had gone through, and she also made several references to how she used the service herself. Call it a subtle kind of marketing if you will, but I actually liked to hear her admit, “A lot of times people say they have a hard time getting into our site as opposed to other sites, and that’s because it’s a very secure site.”

The Verdict

Here’s the recap:

  1. Citibank: Call-center rep did not seem to understand my questions and tried to refer me to the website for answers.
  2. Chase: Call-center rep didn’t offer clear explanations but kept trying to get me to sign up anyway.
  3. Bank of America: Call-center rep understood my questions, explained customer-facing security mechanisms and offered advice about how I could protect myself.

After the calls, I rang Larry Freed, president of the research group ForeSee Results, to see what he thought. Freed is a former banking CTO who does a regular survey on banking customer satisfaction in conjunction with He has told me in the past that customers who have not signed up for online banking often cite security as a factor.

Online banking is a huge area of growth for banks—if they can get it right. According to Freed’s latest survey, customers who are not doing online banking report an overall satisfaction level of 70 on a scale of 0 to 100. For those who do online banking and bill pay, the satisfaction level jumps to 79. What’s more, those who are doing online banking and bill pay are much more likely to purchase additional services from the bank—59 percent likely, rather than 36 percent.

Nevertheless, Freed didnt seem surprised that the banks, for the most part, had so little to say about online security. “The education and communication of security is not done very well,” he said. “For converting non-online banking customers, I think that’s a critical step. But it’s a balance between putting the fear in them and educating them.”

Right now, I’d say, the banks are doing neither.

As for me, if I had a Bank of America account already, I think I’d give online banking a try. It’s not so much that I’m convinced Bank of America actually has better security than Citibank or Chase. The call-center rep doesn’t know that, and none of the banks are going to talk about all their security mechanisms anyway. But I’m heartened that they’re teaching their call-center reps how to explain their security mechanisms to customers. At this point in history, it’s a sad fact that merely being willing and able to talk about security in plain English (even if they don’t want the call to be recorded) puts Bank of America well ahead of its competitors. That’s just not enough to make me change banks, though. Guess I’ll keep buying stamps after all.