E*Trade Financial has become the latest US financial institution to announce a move to two-factor authentication for customers transacting over the Web.
Available in Q2 2005, the new security system uses a small RSA token device to provide customers with a random, six-digit code that changes every 60 seconds. The code is used in conjunction with standard password-based access control measures to offer an additional layer of security to customers.
Lou Klobuchar, president, E*Trade Financial Services, comments: "We are now making available to retail customers an additional and voluntary layer of password security they can deploy on their own computers to address any password access or control concerns that they may have."
He says that pilot tests with 200 customers indicated that users feel more secure and more inclined to move more assets online.
The Digital Security ID is available free to customers with $50,000 or more in combined E*Trade account assets.
In December, The Federal Deposit Insurance Corporation urged US banks to abandon single password-based ID systems in favour of two-factor authentication following a sharp rise in 'account hijacking' ID theft.