TELECOM Digest OnLine - Sorted: US Mandates More Security in Online Banking

US Mandates More Security in Online Banking

Monty Solomon (monty@roscom.com)
Tue, 8 Nov 2005 08:38:38 -0500

Complex ID verification designed to combat fraud
By Hiawatha Bray, Globe Staff

Online banking, advertised by banks as nearly effortless, is about to
become more cumbersome.

Federal regulators, alarmed by the threat of online financial fraud,
are requiring banks by the end of 2006 to provide several layers of
identify verification before customers can access their accounts and
conduct other banking over the Internet.

In addition to standard passwords, customers may soon need a unique
digital 'fingerprint' that will identify their computer for the
bank, or may scan a copy of their real fingerprints to identify
themselves to the bank's network. Another, more cumbersome method
would have customers carrying keyfob-sized electronic 'tokens' that
authenticate their identity.

With some 53 million Americans paying bills, checking account
balances, and doing other banking online, Internet fraud has become a
growing threat to the popularity of Internet business transactions.
Research firm Gartner Inc. estimated in a June report that 2.5 million
people lost money in so-called 'phishing' attacks last year.

Phishing involves thieves who try to dupe customers into providing
account numbers and other sensitive information by directing them to
phony websites that resemble a legitimate business -- frequently a
bank.

Federal financial regulators say these threats are scaring away many
potential customers.

http://www.boston.com/business/articles/2005/11/07/us_mandates_more_security_in_online_banking/

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