Abstract
Overview
In October 2005, the Federal Financial Institutions Examination Council
(FFIEC) published guidelines that call on financial institutions to upgrade
authentication processes by adding a stronger form of authentication during
online transactions. Financial institutions will be audited against these
guidelines beginning in December 2006. Javelin anticipates further guidance
and/or mandates from FFIEC and other regulatory bodies.
With this announcement, financial institutions now face a multitude of
decisions surrounding strong authentication for online account access. In
addition to regulatory compliance, institutions must protect themselves
against asset and reputation risk and potential convenience issues as a
barrier to consumer adoption of certain authentication solutions. Javelin
Strategy & Research (Javelin) has created a model that evaluates certain
technologies for affordability, likelihood of consumer adoption, and
effectiveness against fraud. This report provides an analysis of these
solutions to assist financial institutions in the decision and implementation
process, for making investment decisions.
Primary Questions
- What intra]organizational factors and goals determine the level of
investment and priority for strong authentication?
- What types of strong authentication solutions strike a balance among
implementation cost, consumer usability and the likelihood of adoption, and
effectiveness as a security measure?
- What additional factors must financial institutions consider when
implementing authentication solutions?
- How do recent regulatory changes affect financial institutions' timeframes
and urgency?
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