Lloyds TSB has cut fraud levels to zero for customers taking part in the UK's largest trial of two factor authentication technology for internet banking.
The bank has reached the halfway point of a 30,000 customer six-month trial, but has yet to decide whether there is a business case for rolling out the technology to the rest of its clients.
About 80% of the customers chosen for the trial used their Vasco smart tokens. The bank believes most of the remainder are customers who use their internet banking only occasionally.
Matthew Timms, internet banking director at Lloyds TSB, said the trial is designed to prove the technology and assess its impact on fraud, rather than establish a business case for deploying it.
At the moment, fraud losses from internet banking are manageable, but if fraud levels rise, two-factor technology is there as an insurance policy. He estimates that with a widescale deployment the cost of the tokens could fall to £1-£2 each.
Alliance & Leicester
Alliance & Leicester has confirmed it will begin roll out two-factor authentication technology to its online banking customers before the end of the month. The bank has not yet stated what form its two-factor authentication offering will take.