New figures from the Association for Payment Clearing Services (Apacs) show that fraud losses for online banking have dropped by one third.
In 2007, total losses for online banking fraud were £22.6m - a decrease of 33 percent from 2006, when they totalled £33.5m.
But, while losses from bank fraud have fallen, the numbers of targeted phishing attacks and spyware scams has exploded this year. The UK payments association said there were 20,682 reported phishing incidents in the first half of 2008 - an increase of more than 180 percent from the same period last year.
Fraudsters are turning to phishing attacks to trick online banking customers into divulging their account details, because the banks' own systems have proved difficult to attack, Apacs said. Spyware is another popular method for criminals to retrieve online banking details from unsuspecting users.
The number of people who bank online in the UK has also risen by 505 percent in the past seven years from less than 3.5 million in 2000 to over 21 million last year, according to Apacs. This accounts for more than half of all UK internet users.
Sandra Quinn, director of communications at APACS, said: "In the future we expect more and more people to use online banking to make payments rather than just checking balances, particularly in light of the recent introduction of the new faster payments service. This enables customers to make one-off payments over the internet or by phone within hours, not days.
"However, we strongly urge banking customers to make sure they remain wary of online scams such as unsolicited emails claiming to be from their bank, and to only use a fully protected PC with regularly updated anti-virus software and a firewall installed and switched on."
Apacs has published a 'Banking Safely Online' advice guide for online banking customers, which details how to spot common phishing techniques and explains how to bank safely.