Banks should presume that all customer PCs are infected, according to the European Network and Information Security Agency (ENISA).
The EU cyber security division issued an advisory recommending that banks assume all PCs are infected given "the current situation" of security.
ENISA pointed out that many authentication systems which assumed PCs to be clean have failed to prevent fraud.
It highlighted Operation High Roller, where McAfee and Guardian Analytics warned of high-level bank account hacking yielding at least £47 million ($A71 million) in fraudulent transfers from accounts at 60 or more financial institutions.
"Banks should instead assume that PCs are infected and still take steps to protect customers from fraudulent transactions," the advisory said.
“For example, a basic two-factor authentication does not prevent man-in-the-middle or man-in-the-browser attacks on transactions. Therefore, it is important to cross check with the user [about] the value and destination of certain transactions, via a trusted channel, on a trusted device (e.g. an SMS, a telephone call, a standalone smartcard reader with screen). Even smartphones could be used here, provided smartphone security holds up.”
ENISA also said that as more and more transactions are carried out on smartphones or tablets, we should not take smartphone security for granted, but the rapid adoption of smartphones offers an important opportunity to improve endpoint security - for example by using vetted app stores or smartphones as second factors.
Security blogger Brian Krebs called the advice "blunt, timely and refreshing", particularly for financial institutions.