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Online Banking's Battle Against Phishing

BY Mark E. Plotkin
December 19, 2006

Online banking, which has seen explosive growth in recent years, has made it faster, cheaper, and more convenient than ever before for consumers to manage their financial affairs. It also holds the promise of significant cost savings for the financial services industry, as rising numbers of customers are expected to shift from over-the-counter services to online transactions.

Yet the adoption of Internet banking may be impeded if consumers lose trust in the security of online financial transactions. And while the reputation of online commerce has been affected by various high-profile data security breaches, such as the 2005 Choice-Point debacle, consumer confidence in online banking is also threatened by 'phishing,' the insidious form of identity theft that uses fraudulent e-mails to lure victims to sham Web sites, where they are tricked into divulging ac-count numbers, passwords, and other sensitive information. Al-though there has been a sharp rise in the volume of phishing scams, and the techniques employed by 'phishers' have grown more so-phisticated, banks and other entities have also become increasingly adept at detecting and combating phishing attacks. As this article discusses, there are a variety of steps that financial institutions can take to mitigate the risks posed by phishing and, at the same time, bolster their customers' online confidence.

Overview of Phishing

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