Regulators to Require Banks to Boost Security

Federal regulators will require banks to strengthen security for Internet customers through authentication that goes beyond user names and passwords, which have become too easy for criminals to exploit.

Bank websites are expected to adopt some form of “two-factor” authentication by the end of 2006, regulators with the Federal Financial Institutions Examination Council said in a letter to banks last week.

In two-factor authentication, customers must confirm their identities not only through something they know, such as a personal identification number or password, but also with something they physically have, such as a hardware token with numeric access codes that change every minute.