Token-based Authentication Is a Success for ETrade

But CIO says firm is still evaluating technologies

By Jaikumar Vijayan

November 21, 2005 12:00 PM ET

Computerworld - In March, ETrade Financial Corp. became the first major financial services company in the U.S. to launch a two-factor authentication service to protect customers from online fraud and identity theft. In an interview with Computerworld, ETrade CIO Greg Framke talked about the system, which is based on RSA Security Inc.'s SecurID token technology, and other multifactor authentication services the company is evaluating.


ETrade CIO Greg Framke

How have customers responded to your two-factor authentication service? There's been nothing unexpected, certainly not on the con side. In fact, one nice ancillary benefit is that customers who have adopted SecureID feel more secure.

What was the main driver of the initiative? In the [past], companies focused a lot of their time and energy [on] protecting themselves from people who wanted to hack into the company or launch denial-of-service attacks. While these things certainly haven't gone away, ETrade got the sense early on that there was a trend that [hackers] were starting to go after the weakest link in the chain, which was the customer. We've been employing a number of techniques to help protect our customers. Multifactor authentication is kind of like the padlock on the door.

Is multifactor authentication available to all of your customers? It's available to anybody who wants it. We did a pilot with a restricted number of customers, and the feedback was very positive. It is now available to all our customers. If you are an active trader or have more than $50,000 in assets with us, you can have it for free. Otherwise, you pay a one-time fee of $25.

How do you respond to concerns that token-based authentication is expensive to implement and can be inconvenient for users? I am well aware of those limitations, but we felt that it was too important to give our customers [nothing]. I did it knowing full well that I may end up replacing it with something that is not a hardware token. Our customers really like them, and I'm here for my customers.
Companies need to walk the line between providing real security and providing convenience. Customers are kind of schizophrenic. They want security, but they don't want to be inconvenienced too much.

Are you considering other multifactor authentication technologies? There certainly is room for other multifactor authentication technologies, and we are absolutely continuing to evaluate other techniques. In the technology business, you don't stand still.

Can you tell us what technologies you are evaluating? Probably not. Not because it's a secret, but just because I think we arestill kind of going through some evaluations. We already employ an antiphishing service from Cyota.
Passmark has some interesting technology as well. The trick is using their techniques for authenticating customers in a way that doesn't throw a lot of false positives out there.

Recommend Digg Twitter ShareThis

Email Print Send Feedback Reprints

Additional Resources

Xerox

Win a color printer!

By using solid ink technology only from Xerox, you could save up to 65% by printing color for the cost of black and white. Enter for a chance to WIN a PhaserTM 8860 network color printer!

Microsoft

Upgrade to Internet Explorer 8 today.

Save time and mitigate security risk. Deploy it now.

Sybase

NEXT-GENERATION MOBILITY PLATFORMS

In this white paper, IDC analyzes the role of next-generation mobile enterprise platforms as organizations seek a more strategic deployment of mobile solutions.

Learn the important issues you must consider before starting your next mobility initiative. Get your mobility white paper from IDC now, compliments of Sybase.

White Papers & Webcasts

Centralized Data Backup and Your WAN
Is your organization prepared to tackle the massive challenge of protecting your data in a cost effective and timely manner? With a growing...

Why Compliance Pays
This OnDemand webcast explores the relationship that firms with best compliance records have higher revenue, greater customer retention, lower financial losses from data...

An All-in-One Approach to Web Security
Granting web access to employees poses challenges to IT administrators and introduces unique security risks. Even as companies have perfected their security techniques...

Best Practices for Managing Business Risks from the Use of IT
(Source: Symantec) Based on exhaustive benchmarks conducted by the IT Policy Compliance, this session highlights the relationship between business risks and use of...

The Hidden Dangers of Spam
Beyond the well-understood productivity drain that spam inflicts on businesses, threats posed by illicit email circulating through a network are causing many security...

Managing And Protecting Your Ever Increasing Mobile Assets
(Source: Absolute Software) Your users are becoming more mobile each day. This is great for productivity - yet challenging for IT control. Natalie...

Open Source Security Myths Dispelled
(Source: Astaro) Open Source Software is computer software whose source code is available to the general public. This openly viewable nature...

Sun OpenSSO Enterprise Webinar
(Source: Sun) This webinar replay discusses Sun OpenSSO Enterprise innovation--the single, open-source solution that helps your business solve the challenges around internal access...

Best Practices for Backing Up VMware® with Veritas NetBackup™
VMware® is used by enterprises large and small to increase the efficiency and cost-effectiveness of their IT operations. With this in mind, Symantec...

Agile Enterprise Content Management (ECM) for Rapid ROI
(Source: IBM) Content rich business processes are a core feature of daily operations at just about any organization today. Very often these essential...

All White Papers | All Webcasts