A medieval castle generally had many lines—or layers—of defense to protect itself and its inhabitants from outside attackers. For example, it would have an outer perimeter with a high berm making the passage of horse-drawn weapons difficult. This berm would surround a vast, open space that allowed the enemy no cover. Closer to the castle would be the moat, which enclosed high fortress walls with ramparts that allowed the human defenders to fire down on attackers while still having protective cover. An enemy that successfully breached all layers of security was a strong enemy indeed—or a friend, someone with proper security clearance, who was permitted to pass through.
This multilayered security is highly effective in today's computer age. Financial institutions that haven't done so already should institute such a strong online authentication process. This process would require an individual who needs to access an account to go through multiple layers of authentication according to the risk level associated with the intended transactions. For someone checking an account balance, for example, a user ID and a password may be sufficient. But for someone initiating a wire transfer request for $50,000, more layers of authentication tools are appropriate and in keeping with the 2005 Federal Financial Institutions Examination Council's supplemental guidance for internet banking to implement more robust controls as the risk level of the transaction increases.
Panel members at a recent forum cosponsored by the Secure Remote Payment Council and the Atlanta Fed's Retail Payment Risk Forum provided their assessment of the security tools that can improve online customer authentication. They did this by assigning scores to individuals tools based on a scale of 1 to 10, with 1 being extremely weak and 10 being extremely strong. While members gave pretty low scores to each individual tool, they pointed that a combination of these tools would significantly raise the strength of the authentication process, and presumably the scores of these combinations would be higher.
As the table shows, only one of the tools had an average score above 5.
We cannot say it enough: no single authentication method provides a complete solution. A strong customer/transaction authentication program uses a combination of hardware and software security tools to minimize the success of unauthorized account access. The program also incorporates customer education and training and internal policies and procedures to provide a well-rounded defense.
Portals and Rails is interested in how you would score the various tools and how your institution is implementing a multilayered authentication strategy.
By David Lott, a retail payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed