Alliance & Leicester to introduce two-factor authentication

Alliance & Leicester to introduce two-factor authentication

The UK's Alliance & Leicester has set out plans to introduce two-factor authentication for all Internet banking users by next month.

The UK bank says the new process will provide "a simple and robust way for all our Internet banking customers to be confident that they are dealing with Alliance & Leicester when online".

The bank, which has over one million Internet banking customers, claims it will be "the first UK bank to roll out this type of solution to its entire Internet banking customer base".

In October last year the UK's Lloyds TSB issued 30,000 keyring-sized password generators to trial users as part of a test of two-factor technology.

Alliance & Leicester, which styles itself as a 'direct bank with branches', says the number of transactions carried out via its Web site in 2005 increased by 92% compared to 2004.

Precise details of the new authentication technology have yet to be unveiled.

The news was announced as the bank unveiled its annual results, in which vigorous cost-cutting and a drive to introduce more self-service technology compensated for a slim increase in revenues.

The new authentication technology is one of a range of innovations the bank is planning for the next year. Other plans include:
  • refurbishing 50 branches to a new 'concept design' standard, incorporating technology aimed to help customers to 'self serve' for basic transactions
  • launching a new pre-paid debit card product for use in the business-to-business market
  • testing new cheque and cash deposit facilities, including the use of automated deposit machines situated in 'cash and carry' stores, low cost security carrier collection services, and the acceptance of business deposits at retail branches

The bank has also begun to price its product portfolio to reflect the cost of different distribution channels, with Internet banking accounts accruing greater interest than telephone and branch accounts.

Says the bank: "Customers who are prepared to self-serve get a great price; customers who want a more personal service get great value, but not necessarily our best price."

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