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.