More than three-quarters of bank Web sites have design flaws that could expose bank customers to financial loss or identity theft, according to a University of Michigan study that will be presented this week at the Symposium on Usable Security and Privacy.

The study, "Analyzing Web Sites For User-Visible Security Design Flaws," examined 214 bank Web sites in 2006. It was conducted by University of Michigan computer science professor Atul Prakash and doctoral students Laura Falk and Kevin Borders.

The vulnerabilities identified by the authors aren't fixable with a simple patch. Rather, they are issues like login boxes, information submission forms, security information, and contact information placed on insecure pages; redirections outside the bank's domain without warning; allowing insecure user IDs and passwords; and e-mailing sensitive information insecurely.

"To our surprise, design flaws that could compromise security were widespread and included some of the largest banks in the country," Prakash said in a statement. "Our focus was on users who try to be careful, but unfortunately some bank sites make it hard for customers to make the right security decisions when doing online banking."

Prakash said that some of the issues have been addressed since they were discovered, but that more work needs to be done. At the same time, he advises not panicking because exploiting the vulnerabilities that he and his students found is not easy. In general, he said these flaws become an issue on potentially insecure networks, such as a wireless network not under your control or on a hotel's network.

Prakash and his colleagues point to a recent quarterly FDIC Technology Incident Report, which tracks suspicious activity at banks, to show the extent of the bank security shortcomings. The report identifies 536 computer intrusion incidents with an average loss of $30,000, a total loss of $16 million in the second quarter of 2007.