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Future of Online Bank Security

A Wired News article has some opinions about security changes banks may implement based on the Fed's new requirement that banks strengthen their online authentication by the end of 2006. The article said that it'll be unlikely banks will change to smart-card or hardware token devices that display new passcodes every minute. Instead, they'll probably implement changes that will be less costly and less noticeable to customers.

The article mentioned ING Direct's PIN Guard and Bank of America's SiteKey as examples of systems that could be used to meet the Fed's new policy. I don't think these can be considered true two-factor authentication as I described in this post. I guess we'll have to wait and see if these systems will be good enough to satisfy the Fed and keep online fraud to a manageable cost.