Users of online banking sites tend to bypass critical clues that the integrity of those sites may have been compromised, according to the working draft of a study released on Sunday by researchers at Harvard University and the Massachusetts Institute of Technology.
The study, which will be formally released in May at the IEEE Symposium on Security and Privacy in Oakland, California, underscores how new technologies and warnings can't completely protect Internet users from scams such as phishing.
It also throws doubt on the effectiveness of site-authentication images, which have been implemented by financial institutions such as Bank of America, Vanguard Group and ING Bank. The images, selected by the customers, are shown when a bank customer logs in from a different computer than is normally used.
The study involved 67 users, with more than 90 percent under 30 years old. Because of varying parameters in the study, not all qualified to be included in the results for each of the three tests. Users were ask to conduct common online banking tasks, although precautions were taken to ensure users weren't put at risk.
For the first test, HTTPS indicators -- which show that an encrypted connection is enabled -- were removed from the address bar along with the lock that appears in the bottom right corner of Internet Explorer 6. Although the absence of HTTPS indicators should be a warning, all 67 participants continued with their transactions, the study found.
The researchers then conducted a test where the site-authentication image was removed along with the HTTPS indicators. The researchers wrote it is the first empirical investigation into site-authentication images.
Only two of 60 people chose not to log in when the image was removed, a key sign that a site may have been tampered with or is a phishing site, the study said. Of users who were actually using their own bank account for the study, 23 of 25 continued to enter their passwords.
"We find them [site-authentication images] to be ineffective," the study concludes.
In the last test, researchers made it more obvious, this time replacing a password-entry page with a warning page from Internet Explorer 7 Beta 3. The page advises of a problem with the security certificate of the chosen Web site. Despite the warning, 30 of 57 users entered their passwords.
The study comes as U.S. banks are beefing up their authentication technologies amid new requirements from federal regulators.
In October 2005, the Federal Financial Institutions Examination Council (FFIEC) mandated that U.S. banks implement stronger authentication protections by the end of last year, particularly for high-risk transactions such as sending money to a different person's account.
Bank of America uses site-authentication image technology called SiteKey. Users pick an image and assign a phrase to it while also setting three "challenge" questions. If a user logs in from a computer that doesn't already have a cookie, they're asked one of the challenge questions and then to verify the image and phrase.
If the image doesn't appear or the phrase is wrong, consumers shouldn't proceed. Bank of America said the image system benefits users since it's free and doesn't involve extra hardware or software.