Lloyds TSB is to test the practicalities of using smart
tokens to secure its online banking services as part of the largest
trial of the technology conducted in the UK.
The bank plans to issue 30,000 customers with keyring-sized
devices that will give them secure access to online accounts
through a one-use passcode. The system will be tested for six
months.
The technology is designed to protect customers against phishing
e-mails and Trojan attacks, which attempt to obtain account
holders' log-in names and passwords.
"Fraudsters are becoming increasingly cunning with their
tactics, and there is no hiding the fact that fraud is on the
increase," said Matthew Timms, internet banking director at Lloyds
TSB.
The trial will give Lloyds TSB the option of rolling out a
two-factor security system before the banking industry finalises
work on standards for two-factor systems based on chip and Pin
cards.
"We have made excellent progress on agreeing a set of standards
on how card readers will be deployed, but there is a lot more work
to be done," said Timms. "It will be at least a year before it is
ready, although there may be trials before then."
The cards, supplied by Vasco, will cost Lloyds TSB between £2
and £5 each. If fraud losses increase, there could be a business
case for issuing them to all customers, said Timms.
The trial will allow the bank to assess how customers respond to
the technology and to assess its impact on phishing fraud, which
cost banks £12m in 2004.