Online banking security is going too far!

by John Fitzsimons on 31 October 2011  |  37 comments
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Banks are introducing new features to improve the security of their online banking services, but are they over the top?

Like many people, I do almost all of my banking online. I like to check my balances every couple of days, perhaps move some money between accounts, pay off my credit card bill, all that sort of fun stuff.

And that involves memorising lots of different user numbers and passwords. To their credit, banks have made it far harder to get into their online banking systems, in order to protect their customers. Gone are the days when all you needed was a date of birth, a mother’s maiden name, and perhaps an account number.

Obviously it’s a good thing that banks take banking security seriously – it’s no fun discovering that some fraudster has found their way into your account, and made off with your hard-earned cash.

However, there is a danger that some banks are going a little too far with their measures, and making online banking much more difficult for their customers.

HSBC

I’ve had an account with HSBC since I was at secondary school, and kept it when I switched to Santander last year as a back-up (given Santander’s terrible reputation). So earlier this year I was sent my new ‘security key’, a credit-card-sized device, that resembles a mini-calculator from the 1980s.

It generates a unique PIN each time you want to log on to your account.

The trouble is, it’s yet another thing to carry with you at all times, just in case you need to log on. And the key has taken a kicking from a number of customers, to the point that even Facebook groups have been set up calling for its removal.

Smile

A little while ago, I decided that even though I had no real complaints with Santander, it was time to try another bank. And given its excellent performance whenever we poll readers on the best current account providers, I decided to give Smile a go.

And lo and behold, last week what should fall through my letter box but another device that looks suspiciously like a mini-calculator. Again, a pin will be generated which I need to input online when I want to make a transaction.

These are just two banks which have adopted these devices – Royal Bank of Scotland, Barclays and Nationwide, among others, also use them.

And while I’m pleased that the banks I use take the security of my money seriously, I can’t help feeling these things are a bit over the top. For starters, they are a pain to carry around all the time, particularly if, like me, you have more than one account in use at any one time. And while they are shaped like a credit card, they are far thicker than a card, to the point that you can’t exactly keep it in your wallet.

So what do you think? Are those irritated by these gadgets just overreacting, finding something to moan about which is actually designed to protect them? Or are they right that the whole point of online banking is convenience, and gadgets like this can seriously impair that convenience?

Let me know what you think below.

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