The study, produced jointly by researchers at Harvard and the Massachusetts Institute of Technology, looked at a technology called site-authentication images. In the system, currently used by financial institutions like Bank of America, ING Direct and Vanguard, online banking customers are asked to select an image, like a dog or chess piece, that they will see every time they log in to their account.
The idea is that if customers do not see their image, they could be at a fraudulent Web site, dummied up to look like their bank's, and should not enter their passwords.
The Harvard and MIT researchers tested that hypothesis. In October, they brought 67 Bank of America customers in the Boston area into a controlled environment and asked them to conduct routine online banking activities, like looking up account balances. But the researchers had secretly withdrawn the images.
Of 60 participants who got that far into the study and whose results could be verified, 58 entered passwords anyway. Only two chose not to log on, citing security concerns.
"The premise is that site-authentication images increase security because customers will not enter their passwords if they do not see the correct image," said Stuart Schechter, a computer scientist at the MIT Lincoln Laboratory. "From the study we learned that the premise is right less than 10 percent of the time."
He added: "If a bank were to ask me if they should deploy it, I would say no, wait for something better," he said.
The system has some high-power supporters in the financial services world, many trying to comply with new online banking regulations. In 2005, the Federal Financial Institutions Examination Council, an interagency body of federal banking regulators, determined that passwords alone did not effectively thwart intruders like identity thieves.
It issued new guidelines, asking financial Web sites to find better ways for banks and customers to identify each other online. January 2007 was set as the compliance date, though the council has yet to begin enforcing the mandate.
Banks immediately knew what they did not want to do: ask customers to download new security software, or carry around hardware devices that feed them PIN codes they can use to authenticate their identities. Both solutions would add an extra layer of security but, the banks believed, detract from the convenience of online banking.
The image system, introduced in 2004 by a Silicon Valley firm called PassMark Security, offered banks a pain-free addition to their security arsenals. Bank of America was among the first to adopt it, in June 2005,, asking its 21 million Web site users to select an image from thousands of possible choices and to choose a unique phrase they would see every time they logged in.
SiteKey "gives our customers a fairly easy way of authenticating the Bank of America Web site," said Sanjay Gupta, an e-commerce executive at the bank. "It was very well received."
The Harvard and MIT researchers, however, found that most online banking customers did not notice when the SiteKey images were absent. When respondents logged in during the study, they saw a site maintenance message on the screen where their image and phrases should have been pictured. The error message also had a conspicuous spelling mistake, further suggesting something fishy.
Gupta of Bank of America said he was not troubled by the results of the survey, and stressed that SiteKey had made the bank's Web site more secure. He also said that the system was only a single part of a larger security blanket. "It's not like we're betting the bank on SiteKey," he said.
Most financial institutions, like Bank of America, have other ways to tell if a customer is legitimate. The banks often drop a small software program, called a cookie, onto a user's PC to associate the computer with the customer. If the customer logs in from another machine, he may be asked personal questions, like his mother's maiden name.
Rachna Dhamija, the Harvard researcher who conducted the study, points out that swindlers can use their dummy Web sites to ask customers those personal questions. She said that the study demonstrated that site-authentication images are fundamentally flawed and, worse, might actually detract from security by giving users a false sense of confidence.
RSA Security, the company that bought PassMark last year, "has a lot of great data on how SiteKey instills trust and confidence and good feelings in their customers," Dhamija said. "Ultimately that might be why they adopted it. Sometimes the appearance of security is more important than security itself."