5. Criminal opportunities

But it wasn't long before the crooks started to take advantage of online banking.

Online banking meant that for the first time, bank fraud - on an industrial scale - could be done from outside, without having to rely on bank employees to pull it off.

"It's so much easier to steal from a bank online than it is to hire a Ford Cortina and put a stocking over your head," says Graham Cluley, senior technology consultant for internet security firm Sophos. "And there's no danger of a granny clobbering you over the head with her brolly."

By January 2000, there were reports of frauds on a California bank which - unwisely - had failed to check the identities of people requesting transfers from existing accounts into new online ones.

In the UK, Egg admitted that crooks had set up accounts with fake identities for fraudulent purposes.

That same year, fake banking websites started to appear around the world to snare the unwary into giving away their details.

And by the start of 2004, the all-too-familiar phishing emails began to fill up email inboxes worldwide - to the extent that now more than one in 100 emails is a phish - and organised criminals began to get in on the game.

Challenge and response

As the threats have developed, so have the responses.

More and stronger passwords came first.

Then, as trojans - bits of rogue software downloaded to people's computers without their knowledge - began to let crooks "sniff" keystrokes, banks switched to methods which needed a mouse instead.

So the trojans started to take pictures of screens instead.

Now, more and more banks are getting their customers to use tiny devices which generate apparently random numbers, in an attempt to stay a step ahead of the fraudsters.

And yet the fraud continues.

Risk versus convenience

All this has left many people extremely nervous.

In a survey of its own customers, Nationwide found that almost half still did not trust online banking. But of the 37% of its customers who did, the vast majority - more than four out of five - thought it was safe.

And although there are many experts who flatly refuse to go anywhere near online banking, Graham Cluley is not one of them.

"As long as you keep your computer up-to-date with antivirus software and a good firewall, and exercise the usual caution about what you do online, I don't see any reason not to use it," he says.

Adapted from: http://news.bbc.co.uk/1/hi/business/6693121.stm