Banks not encrypting confidential data: survey

Two-thirds of financial institutions use unencrypted delivery methods to send confidential documents to customers, partners and service providers, a survey claims.

The survey of 347 banks, credit unions and mortgage companies conducted by Wolters Kluwer Financial Services found that one-third use traditional e-mail to send confidential data.

Another third are said to rely on methods such as password-protected websites, regular or overnight mail, or are unsure of the method they use.

According to Jason Marx, vice-president and general manager of the mortgage division of Wolters Kluwer Financial Services, the recent growth of identity theft and other forms of electronic fraud make it harder to send documents or information safely via traditional mail, e-mail and websites.

“Even with password protection, fraudsters can hack into these systems to access customer information,” he said.

Marx recommended use of a secure, electronic delivery system that encrypts sensitive data.