Users of its ebanking facility will now be required to type in their password using the on-screen keyboard, preventing key-logging virus from recording customer information.
Industry body Association for Payment and Clearing Services (APACS) welcomed the news.
"It's a valid approach to tackling the issue of online fraud," said Tom Salmon, who manages ebanking at APACS. "Attacks are becoming more and more sophisticated and APACS welcomes this initiative."
But Salmon insisted it was only one step in a wider movement to secure ebanking and protect customers.
"I guess the key thing is constant evaluation of threats," he said. "We've seen drop down lists, partial passwords and two-factor authentication is often talked about. Banks are not standing still, this is part of an ongoing process that includes education of customers."
The online banking industry has been beset by stories of security scares over recent months. In November SC reported blunders at Cahoot and Morgan Stanley.
Despite these setbacks evidence suggests that ebanking is on the rise.
