High fear of online banking, says study
Fear of cybercrime abounds in Barbados, a recent CIBC FirstCaribbean study has revealed. And it is for this reason a number of Barbadians are not engaging in more electronic banking and e-commerce activities.
The study, which was conducted in Barbados and Jamaica, showed a majority of residents not being fully aware of the benefits of online banking. It also revealed that various forms of media were responsible for fuelling fear among residents when it came to the issue of cybercrime.
The study examined The Fear Of Cybercrime And Its Implication For The Electronic Banking Sector. It was designed, among other things, to determine to what extent fear was a problem to online banking.
Delivering the findings at the second annual CIBC FirstCaribbean International Bank And UWI, Cave Hill Campus Breakfast Presentation, director at the Centre For Leadership And Governance at UWI, Mona Campus, Dr Lloyd Waller, suggested that more could be done to encourage a greater take-up of online banking among people in the region.
“It was the issue of trust in 2011 that led us to, in 2012, explore the issue of fear of cybercrime, and we did a qualitative study. Out of that study one of the major findings was that many persons who actually have bank accounts do not bank online because they are concerned about issues of trust, and they are very fearful about persons hacking their bank account,” said Waller.
“The fear is very substantive and the fear is very real,” he added.
However, Waller said over the past two decades e-banking had become the norm in several developed nations, including the United States and parts of Europe. He acknowledged that there were only small pockets of e-banking in the region.
Pointing to the advantages of online banking for customers, Waller said it provided 24-hour access, convenience and cost effectiveness.
“To the banks it provides a larger consumer coverage, it’s cost-effective and it promotes other services as well,” he said.
“Some of the disadvantages, however, for customers are issues of security, issues of accessibility, problems and challenges as it relates to stability not only on the basis of the bank but on other factors such as Internet service provider and power companies, and trust,” he said.
On the part of the bank, Waller said there was need for improved knowledge and skill about electronic banking, reliability and willingness to change.
The study showed that age, gender, socioeconomic status, race and ethnicity, physical environment, as well as perception of risk, played a major role in the determinants of fear among residents.
He identified a number of cybercrimes, including computer fraud, email bombing, unauthorized computer access, and lotto scamming in Jamaica, as well as cyberstalking, as the most popular.
He pointed out that owing to cybercrime, economies around the world were losing hundreds of billions of dollars each year.
“Unfortunately, globally the whole issue of cybercrime is very problematic. There are substantive losses due to cybercrime,” he lamented.
And while the number of actual victims of cybercrime was low in Barbados, the study showed that the fear of online banking remained high.
In Jamaica more people said they have either been a victim of cybercrime or know persons who have been victims of cybercrime.
“The study showed that there was a low use of electronic banking when compared to the United States and other countries around the world. In Jamaica this was an issue because of the level of education on the subject and the issue of access,” he said.
“When asked the reason for not using electronic banking, the majority of the persons on both islands argued that they preferred face-to-face transactions. In some instances, particularly in Jamaica, a large number of persons didn’t know about online banking,” he explained.
Waller said for those who did online banking, they indicated the top three reasons were to check their accounts, transfer money and pay bills.
“What we found was that persons are least fearful of using a credit card during a face-to-face transaction,
and persons are more fearful of doing financial transactions in spaces that are far away,” he said.
Fellow at the Sir Aurthur Lewis Institute Of Social And Economic Research, Dr Corin Bailey, said in the case of Barbados, respondents agreed in every circumstances that they could use their cards, they were fearful.
“Fear in Barbados was more acute with regards to local transactions. So they were most afraid of using their credit cards to pay for something on a local website, followed by paying for something in a local store and then giving their credit card information to somebody over the phone locally . . . .
“Overall, credit cardholders in Barbados were very apprehensive towards using the credit card irrespective of the setting. Both in Jamaica and Barbados there was fear, but it was a bit unique in Barbados that they were fearful in every setting,” he explained.
He said based on the data analysed “it was observed that risk perception was very integral in influencing levels of fear”.
“The data suggested that the factor that contributed most significantly to this was the media. It feeds off the vulnerability of public ignorance in terms of the level of cybercrime and what cybercrime is,” said Bailey.
Adding that the conviction rates did not match the magnitude to which cybercrime was being reported, Corin said: “It was clear that cybercrime has a potential to cause a panic”. (MM)