Beyond FFIEC Compliance: Creating an Evolving Authentication Platform for Higher

Beyond FFIEC Compliance: Creating an Evolving Authentication Platform for Higher Lifetime Consumer Value

Product Type: Market Research Report
Published by: Javelin Strategy & Research
Published: October 2006
Product Code: R3424-18

Description

Overview

This comprehensive assessment of online financial institution (FI) authentication solutions and vendors contains detailed recommendations for selecting the best solutions and providers or adapting current authentication systems to be more robust, FFIEC compliant, cost effective and customer-focused. This report pairs consumer preference research, vendor and financial institu-tion (FI) analysis and previous Javelin research in risk and fraud to create the Evolving Authen-tication Platform surrounding multi-factor authentication. FIs must constantly evaluate their se-curity position with respect to evolving threats, new security solutions and consumer attitudes; however, no FI has implemented solutions that meet the optimal security requirements recom-mended by the Evolving Authentication Platform. This failure to adopt exposes FIs to risks that have ramifications beyond FFIEC compliance.

Key Questions

How effectively does FFIEC compliance protect consumers?
How will consumers react to increased security, and what solutions do they prefer?
How will improved protection strengthen consumer adoption and loyalty?
What vendor solutions should FIs select, and what changes must vendors make?
What specific risks can FIs address with the Evolving Authentication Platform?

Primary Findings

FIs must set their goals higher than FFIEC compliance, creating the Evolving Authentication Platform to incorporate log-in and session risk models and challenge stages to strengthen their existing systems, ensure compliance and meet consumer usability and security needs. Cur-rently, many risk or transaction-based authentication solutions do not meet FFIEC compliance and even those solutions that do meet the guidelines are not sufficiently secure to limit or deter evolving fraud threats. Those FIs that have begun to engage in stages of the Evolving Platform are currently starting at different points and migrating down the Evolving Platform’s path at vary-ing speeds. Consumer desire for visible, active, real-time solutions and their willingness to be actively engaged in account protection can be used to FIs’ advantage in implementing more ro-bust and effective security solutions that inspire consumer confidence and encourage online channel adoption.

Audience: Financial institutions—fraud & risk, online banking, and marketing divi-sions; authentication technology solution vendors; security brokerages

Authors: Don Phan, Senior Analyst, Jean M. Garascia, Research Associate

Table of Contents

OVERVIEW
KEY QUESTIONS
PRIMARY FINDINGS
INTRODUCTION & BACKGROUND
EVOLVING AUTHENTICATION PLATFORM: DUAL RISK AND DUAL CHALLENGES
CONSUMER PREFERENCE, COMPLIANCE AND CROSS-CHANNEL PROTECTION
OPTIMAL SOLUTIONS IN THE EVOLVING AUTHENTICATION PLATFORM
EXISTING SOLUTIONS PLUG INTO THE EVOLVING PLATFORM
WORKING WITH PRESENT SYSTEMS: INTEGRATING TOKENS AND SESSION-RISK ASSESSMENT
VENDOR ANALYSIS AND BEST OF BREED
CONCLUSIONS
METHODOLOGY
RELATED RESEARCH
APPENDICES
Table of Figures: FIGURE 1: EVOLVING AUTHENTICATION PLATFORM; FIGURE 2: CONSUMER VIEWS ON RESPONSIBILITY FOR ONLINE PROTECTION; FIGURE 3: ALWAYS VISIBLE VS VISIBLE ONLY AFTER ADDITIONAL VERIFICATION; FIGURE 4: CONSUMER AUTHENTICATION PREFERENCES; FIGURE 5: CONSUMERS PREFER IMMEDIATE AUTHENTICATION FOR UNUSUAL ACTIVITIES; FIGURE 6: FI’S CURRENT SOLUTION VENDORS; FIGURE 7: HOW FI’S ARE STRUCTURING SECURITY BASED ON VISIBILITY BY AND INTERACTIVITY WITH THE USER; FIGURE 8: TOP VENDORS PROVIDING A COMPLETE SOLUTION; FIGURE 9: VENDORS PROVIDING BEST SOLUTION AT EACH STAGE OF THE EVOLVING PLATFORM; FIGURE 10: EFFECTIVE SECURITY SOLUTIONS INCREASE CONSUMER ONLINE BANKING

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