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Area of Interaction - Business and Employment

Banking and Finance: EFT, ATMs, Internet banking (IB) and brokerage, electronic
cash, insurance

How much do you know about banking and making financial transactions online?
Before we can have an informed discussion of the social impact and ethics of e-
finance, you need to educate yourself on this topic.

News Articles IB Sites Discussion Articles


IB via TV remote NAB (in the menu on the Tips for Safe IB
IB Safer left side of the page choose What You Should Know
demonstration)
How Safe is IB? Phishing Quiz
NETbank (in the menu
Fear of IB
on the left side of the page
ATM skimming choose take a test drive)
The Wallet Phone

Make notes on Internet Banking

Now complete the questions


Internet Banking Worksheet
Koreans will soon be able to withdraw money from their bank accounts by using their
TV remote control, as a growing number of lenders are taking advantage of the latest
technology that allows their customers to access banking services through their
television sets.
According to banking industry sources, six domestic lenders, including Kookmin
Bank, Kyongnam Bank and Industrial Bank of Korea, will establish what they call the
"Korea Financial TV" channel, in affiliation with local telecommunications operator
Dacom Corp., to offer banking services through the TV channel beginning in March.
In television banking, a digital television channel is linked to a high-speed data cable,
which allows two-way communication between signal transmitters and the TV user.
Customers, by using their TV remote control, can access banking services provided
on a certain cable channel. To access their bank account, customers need to enter
personal information for identity verification and to get an online certificate. Once
logged on, customers can access all services available through Internet banking,
ranging from deposits and withdrawals to opening and closing accounts.
But these six banks are not the only ones to embrace the latest technology. Woori
Bank is also planning to launch its own television banking service, which it calls "T-
Banking service," in collaboration with a television operator, beginning next year.
Shinhan Bank has also begun a joint project with a local cable channel operator to
offer its television banking services next year. As the leader of the pack, SC First
Bank started providing TV banking services in collaboration with local digital satellite
broadcaster SkyLife in August.
The current TV banking services are limited to those available on the Internet, but the
banks are planning to further expand the range of services, allowing customers, for
instance, to buy products on home shopping channels and pay for them automatically.
"Since TVs are on for so many hours a day, those who are not familiar with using
Internet banking, such as housewives or the elderly, can access banking services more
easily," a banking industry representative said.

Identity theft

Internet banking 'safer'

Regulators demand 'two-factor' authentication

By Brian Bergstein / Associated Press BOSTON -- If you do banking


over the Internet, generally the drill is pretty simple: You enter your
user name and password, and away you go.

But behind the scenes, the bank can do a lot to check you out: Are
you at your home computer, or at one with an Internet address that,
strangely, is registered overseas? Are you logging on at an unusual
time of day, or from a super-fast connection when normally you
have dial-up?

This kind of analysis is one example of the layers that bank Web
sites will add by the end of 2006 to meet new demands from federal
regulators for "two-factor" authentication. That essentially means
checking something more than just user name and password to
verify a customer's identity.

"Phishers" and other Internet fraud artists have become adept at


stealing passwords, mainly through "social engineering." Preying on
people's propensity to believe something seemingly authoritative,
criminals send authentic-looking e-mails that send unsuspecting
people to an authentic-looking Web site where they give away their
data.

Many banks overseas, where data-privacy laws are stronger, already


have deployed a second level of authentication. They give
customers specialized hardware, such as a "smart card" or an
electronic token that displays a changing series of passcodes.

Cost-conscious U.S. banks are unlikely to go as far. Instead, they'll


probably perform tweaks inside their own Web servers that most of
us will barely notice.

"We're trying to come up with something here that's very user-


friendly," said Jim Maloney, chief security executive of Corillian
Corp., a Web-banking services company that offers login-analysis
software.
If the software raises red flags about a user's profile -- because, say,
he one day logs in from Denmark instead of Denver -- the bank can
confirm his identity by asking a series of questions that only he is
likely to know, such as the amount of his last mortgage payment, or
the street he grew up on.

That kind of fraud detection has long existed on credit cards, and
the fact that Web banking has yet to widely deploy it says a lot
about the state of the industry.

Although identity theft and other financial fraud have garnered a lot
of attention and are believed to be getting more sophisticated,
banks have been reluctant to do anything to increase the cost and
complexity of their Web sites.

After all, the Internet is supposed to be banks' low-cost platform,


cheaper than having customers deal with tellers or ring up the help
desk. The efficiencies of self-service Web banking likely have
outweighed the costs of fraud, which some estimates have placed
as low as $137 million worldwide in 2004.

"Right now banks don't have that much security around checking
accounts," said Avivah Litan, an analyst with the Gartner research
firm.

However, on Oct. 12, the Federal Financial Institutions Examination


Council, an umbrella group of U.S. regulators including the Federal
Reserve and the Federal Deposit Insurance Corp., told banks to
strengthen their online authentication by the end of 2006. Auditors
will examine those efforts in regular inspections.

The policy was widely interpreted as a boost for security providers,


who are tired of seeing banks kick the tires of two-factor
authentication services but generally not buy.

According to a June report from the FDIC, a handful of U.S. banks


had given customers tokens with passcodes that change every
minute. The codes are generated by an algorithm programmed into
the token and confirmed on a central authenticating server, making
the password impossible to guess.

But tokens create their own headaches. They're relatively costly to


deploy and can prompt calls to customer service if they're lost.
Banks also fear a "necklace" scenario in which customers end up
with an annoying strand of tokens.

Saving & banking

Thousands in fear log off from banking


Richard Dyson, Mail on Sunday
13 November 2005

FEAR of crime has scared thousands of people from banking over the
internet. Forrester Research, which analyses technology trends, said in
August that 600,000 online customers had gone back to using the phone
or branch network since the start of the year.

Ken Farrow, who ran the City of London Police fraud squad until three
months ago, says: 'We've had to up the ante when it comes to the
internet.'

Farrow now works for Lloyds TSB, shielding the bank and its customers
from financial crime. 'Internet-related fraud costs 12m a year, which is
nothing in the context of total fraud,' he says.

'But the villains are looking ahead. Chip and Pin technology has stamped
out some card fraud, but there is no doubt that criminals will gravitate to
other areas. We love using the web for shopping and banking, but we must
take care.'

Financial organisations ploughms into defending their systems, not only by


using technology, but also through training staff and devising ways of
blocking any access by employees to clients' security details. Many banks
now apply double-level password protection, where users have to enter
other information as well as passwords to access websites.

Lloyds tested new technology with 30,000 of its regular internet banking
customers-last month. It sent them keyring-sized devices that generate
six-digit codes to be typed in alongside user names and passwords.
Because the 'keyrings' have unique codes, key-logging fraud is cut.

Anne Gunther, chief executive of Standard Life Bank, believes that most
users of online services are getting better at security. 'For the banks, it is a
never ending battle against crime,' she says, 'but we do expect customers
to take precautions, too. Most of us have passwords to prevent access to
our computers at work, but not necessarily at home. If you save your log-
on details on your computer, you are making yourself vulnerable.'

Are the dangers significant? Yes - if you are careless. Organisations will
accept liability for losses if there is genuine fraud, but not if customers
have been careless with their Pins and passwords.

Gunther makes the point that identity theft, where fraudsters use a
person's details to apply for credit fraudulently, remains a largely paper-
based crime. 'By using the internet and cutting down on the amount of
paper statements and other information that you receive, you can make
yourself more secure,' she says. 'Minimise your paper trail by shredding
what you don't need and keeping the rest somewhere safe.'
Most internet banks allow customers to view statements dating back two
years online.

Local ATM Tampering May be Linked to International Scam


Written for the web by Elizabeth Bishop, Internet News Producer

Investigators say they've traced an international ATM fraud scheme to the Sacramento
area. The scam involves "skimmers" or devices placed over the front of the opening of
an ATM in order to steal financial information.

One Sacramento resident told News10 he was a victim. The man, who wanted to be
identified only as "Lloyd," said he noticed $600 in withdrawals from his Wells Fargo
account he didn't make. Some of the transactions occurred as far away as Estonia, in
eastern Europe.

Customers from Bank of America have also been affected, according to investigators,
and more than 1,000 thousand local debit card holders with Golden One Credit Union
have had their cards frozen, after possible fraud involving hijacked card numbers.

Investigators say there is an international black market for ATM information. "They
take your information, put it on a new card, and they're golden," said Lt. Bob Lozito
with the Sacramento Valley Hi-Tech Crime Task Force. "They can take that
information and have as much fun as you've got money."

Under the law, banks must reimburse customers for money withdrawn fraudulently.

Police say skimmers on ATMs may be a different color than the machine or it may
look like a box, requiring customers to swipe their cards instead of inserting them. A
customer swipes his card and then a hidden camera typically records him inputting his
personal identification number.

Tips for Safe Banking Over the Internet

As use of the Internet continues to expand, more banks and thrifts are using the Web to offer products
and services or otherwise enhance communications with consumers.

The Internet offers the potential for safe, convenient new ways to shop for financial services and
conduct banking business, any day, any time. However, safe banking online involves making good
choices decisions that will help you avoid costly surprises or even scams.

This brochure offers information and tips to help you if you are thinking about or already using online
banking systems. We will tell you how to:

Confirm that an online bank is legitimate and that your deposits are insured
Keep your personal information private and secure
Understand your rights as a consumer

Learn where to go for more assistance from banking regulators