Banks step up internet security

Many countries have increased the levels of online banking security to reduce the risks of 'phishing'.

09:43 10 June 2005

Many countries have increased the levels of online banking security to reduce the risks of 'phishing'.

Internet banks are now moving towards the use of two-factor authentication which means even if the users' password is discovered fraudsters are unlikely to get past the second-level defence.

According to Graham Titterington, the principal analyst at Ovum, the Bank of America says it will introduce two-factor, two-way authentication to around 13 million online banking customers.

The move follows advice from the Federal Deposit Insurance Corporation (FDIC) that tighter security was needed.

The Hong Kong Monetary Authority (HKMA) is also on course to roll out two-factor authentication to their 2.7 million internet customers this month, while banks in Australia and the UK are following.

However, at present there is not a single, standard second-level authentication - a good thing when it comes to stopping hackers get ahead of the game.

And so far the various security devices include more than just digital certificates, fingerprints or one-time passwords.

For example, as Mr Titterington points out, the Bank of America is using "a digital checksum that is derived from an image of their regular computer, backed up by pass phrases, personal questions and image selection for initial registration and use of guest machines".

However, only time will tell if these precautions are enough to allay customer fears over online security.