E*Trade adopts additional security for traders
Online financial firm offers password-generating key fobs to major account holders. Photo: Key to security and privacy?
E*Trade users who adopt the thumb-size devices will have to enter a six-digit key generated by the key fob in addition to their user name and password. Traders who make at least 15 trades a quarter or carry a minimum account balance of $50,000 can apply to be part of the new program and will receive the security device for free.
"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," Lou Klobuchar, president of E*Trade Financial Services, said in a statement.
The financial company announced the move in answer to sharp consumer concerns over online security resulting from several high-profile data leaks. In February, data aggregator ChoicePoint warned that almost 150,000 consumer files had been compromised by fraudsters who had set up fake companies to garner identity information. Last week, financial services giant Bank of America alerted government workers that backup tapes containing their information had gone missing.
Such worries have companies concerned that consumers will think twice before spending money online. In its announcement, E*Trade pointed to statistics from industry data firm Forrester Research that found that 26 percent of consumers have stopped applying for financial products online because of e-mail fraud fears.
E*Trade customers who want to apply for the new program can go to the online security site that the firm has created. The deadline to apply is March 10, the company said. The tokens will be shipped in 8 to 10 weeks.
The key fobs are about the size of a person's thumb and are made by RSA Security. Known as SecurID, the devices generate a six-digit code every 60 seconds, a series that is different for every device. Users will have to enter the code along with a password and user name to gain access to their E*Trade accounts. Each key fob has a serial number, which lets the service know which series of numbers the token will generate, and an expiration date.
"When we talked to the banks and financial firms, as well as online businesses, they are very concerned about their financial data," said John Worrall, vice president of worldwide marketing for RSA Security. "Consumer confidence in the Internet as a place to do online business has dropped. You really have to have strong security offerings to grow your business now."
This is the second major deal for consumer deployment of the RSA SecurID tokens. In September, the company announced that America Online would offer its customers the ability to use SecurID as part of the login process. To date, more than 15 million SecurID tokens have been deployed by businesses worldwide, Worrall said.
Worrall noted that the key fob keeps support costs for the introduction much lower.
"The benefit is that the token is totally portable and doesn't require any software or hardware on the desktop," he said.