• vzbv investigation: App-based offers are the most widespread when it comes to proof of identity.
  • App-based processes can present hurdles to consumers or even exclude them.
  • vzbv requires that payment service providers must always offer free, secure and easily accessible proof of identity.

Two-factor authentication makes online banking more secure, but can also present consumers with hurdles: for example if the smartphone is too old or a chip TAN device has to be purchased at their own expense. A current study by the Federal Association of Consumer Organizations (vzbv) among 25 providers shows that app-based identity verification procedures (authentication) are the most widespread. However, these not only create hurdles, but also exclude consumer groups. The vzbv requires that providers must always offer a free and secure authentication procedure that, if possible, all consumers can easily use.

“People who don’t want to or can’t use a smartphone for banking often have to spend additional money,” says Dorothea Mohn, head of the financial market team at vzbv. “There are good reasons why you can’t or don’t want to link your banking transactions to your smartphone.”

Providers primarily rely on app-based processes

Consumers complain to consumer advice centers because established TAN procedures are being abolished or technically changed. Or only procedures are offered that some consumers cannot or do not want to use.

Based on these complaints*, the vzbv examined the identity verification procedures (authentication) of 25 banks and savings banks. It turns out that the providers examined primarily rely on app-based procedures such as the pushTAN app. These are entirely free.

On the other hand, consumers have to purchase chip TAN devices at their own expense, sometimes several times. There are also isolated solutions where a device can only be used with the respective provider. According to the vzbv study, private and direct banks in particular use isolated solutions. Chip TAN devices for blind or visually impaired people were only offered in two of the 25 cases examined. According to the study, only cooperative banks and savings banks offer the particularly secure chipTAN process, which was developed specifically for payment transactions, with one exception.

“The EU has been pursuing the goal of strengthening competition in payment transactions for several years. For example, changing accounts has been made easier in order to reduce hurdles for consumers. However, this goal is thwarted by chip TAN devices, which you have to buy separately for each institute. Switching accounts will not only be more complex, but also expensive,” says Mohn.

EU must tighten PSD2 payment services directive

Two-factor authentication was introduced as part of the European Payment Services Directive PSD2. The European Commission is currently reviewing the directive. The vzbv demands to ensure that providers must offer at least one free-based method that is safe and can be easily used by as many consumers as possible.

“The upcoming revision of the Payment Services Directive PSD2 is a real opportunity to make consumers’ everyday financial lives a little easier – without compromising on security,” said Mohn.

Method : The Financial Market Market Observation Team conducted desk research on the websites of providers in the banking segments relevant to the German market in the period from July 13th to 22nd, 2022.

Authentication instruments at banks and savings banks | vzbv results paper | August 24, 2022
ViewPDF | 283.62KB

source

Federal Association of Consumer Organizations

Also read: Phishing wave on online banking


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