Online banking security boost: Credit union shifts to two-factor authentication

Addison Avenue Federal Credit Union, based in Palo Alto, Calif., is taking steps to strengthen its online banking security by implementing two-factor variable-password authentication, becoming one of the few in the industry to do so.

The credit union is encouraging customers to switch from simple password authentication to the far stronger two-factor authentication, which makes use of VeriSign’s handheld token to generate a one-time password. In addition, VeriSign offers applications for the Blackberry or iPhone that can be downloaded to these mobile devices and used to turn a smart phone into a variable-password generator.

While use of the VeriSign variable-password technology won’t be required, it will be encouraged, says Fisher. The credit union, which has 150,000 members, many of them associated with the high-tech industry, will launch the service for free in the roll-out phase but will likely charge for the service down the road. For those using the stronger two-factor authentication, an annual fee of $10 for the service is anticipated, plus $10 for a handheld token. The iPhone and Blackberry applications are available for free.