Monday, 7 August 2006

Electronic Password Gadget to Tackle Internet Fraud

"We have gone for this model because it resists all known methods of fraud", Barnaby Davis, director of online banking at Barclays, said. Barclays plans to introduce hand-held devices to its 1.6 million online banking customers next year which will read the chip on the customer's bank card and then provide a unique password needed to access the account on the bank's web site. Every time the customer logs on they will need to get a new password using the calculator-sized device. Many Internet bank customers are to be sent electronic password-generating gadgets in an attempt to tackle increasing levels of Internet fraud.

Many of Barclays Bank's business customers already have access to one-time password generating devices for bank accounts. Mr Davis said "We want to issue the card readers to all online banking customers and not just business customers", in order to stay ahead of the Internet criminals.

Identity fraud is causing a deep dent in the pockets of banks; it is in their interests to invest in the technology. Online banking fraud, doubled in the UK to Ј23.2 million last year. And analyst firm Forresters claims 600,000 of the UK's 15 million online banking customers have stopped using the Internet because of fears over identity theft.

Graham Titterington, principal analyst at commercial technology advisers Ovum, said: "Online banking now has so much momentum behind it that if they don't provide this service someone else will. You have to compare the cost of issuing these readers with the cost of providing manual banking services, or indeed the cost of fraud."

Lloyds TSB has developed a key ring sized random password generator for customers. The password linked to a specific account changes every 30 to 60 seconds. A Lloyds TSB spokeswoman said, "Identity theft is a very important issue and one that quite rightly concerns customers."