A Bermuda bank is to beef up its security — and axe its current online safety system which uses a key-shaped tag to generate a security code.

But the bank said the decision to start an automated phone “call-to-verify” scheme for transactions that raise a red flag at the Bank of Butterfield was unrelated to a security scare that has led to the replacement of customers’ cards.

A spokeswoman for the bank said: “There is no connection between the replacement of cards and our change in online banking access.”

And she said card replacements were mostly due to the hacking of a local supermarket chain’s till network.

Now Butterfield customers will have to register up to two phone numbers with the bank.

After that, if a transaction is thought to be suspicious, customers will get a call asking them to verify and authorise the transaction by keying in a four-digit code on the Butterfield Online site into their phone.

If customers fail to answer their phone or key in the wrong number the transaction will be declined.

The Butterfield spokeswoman added: “Butterfield Bank constantly reviews its online security to provide the safest way for customers to access their accounts.

“As part of our ongoing efforts we are adopting technology that is used by many large banks and financial services firms across the globe to provide enhances security to our customers.”

The bank’s website said the new system will work alongside existing fraud monitoring services already in place.

It added that customers will still need to use their login and password to access Butterfield online banking as part of the login or to validate transactions like fund transfers.

The new security arrangements came into force last month, with customers being asked to register for the call-to-verify system between then and June.

The bank said that — because of the large number of accounts involved — registration will be carried out in phases.

The website said: “Once you have registered, the next time you initiate a transaction in Butterfield Online that is of a type considered to carry a risk of fraud or outside of your usual pattern of banking, you will be prompted by the system to authenticate the transaction via the call-to-verify system.”

Customers will be able to register both landlines and cell phones with the bank and numbers will be partially blocked on the system and display only the phone type and last four digits as a security measure.

If there are consistent incorrect code-entry attempts, the bank will automatically disable online access until the customer contacts the bank to reset it.

The website tells customers: “The call-to-verify system uses sophisticated screening techniques to identify transactions that are considered higher risk or outside your usual pattern of banking.

“So, if you log in from a new location — IP address — that you haven’t used before, for example, call-to-verify will ring you to make sure you’re the person who is making the transfer request.”

The website added: “There are a large number of scenarios that have been identified that will trigger a call to protect you, but generally, paying bills or transferring money to existing beneficiaries from a computer, tablet or phone that you usually use to do your banking with Butterfield won’t trigger a call.”