| Telephone Banking vulnerable |
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| Thursday, 22 March 2007 | ||||
 Performing financial transaction over the telephone could turn out to be definitely risky. According to a new research by the US firm Javelin Strategy & Research , Telephone banking is less safe than other online banking channels, since while banks move to multifactor authentication online, on the telephone authentication methods are less stringent.Telephone banking users can authenticate by IVR (Interactive Voice Response) , selecting options from a voice menu or interacting with the computer phone system. The introduction of voice biometrics seemed to mark a milestone for security but actually recent studies revealed that such innovations are not enough. Indeed, of the top 23 banking and financial institutions in the USA, just one fourth use to ask for a full Social Security Number to verify customers, and just 8% appeal to passwords or security questions. The risk represented by vulnerabilities in Telephone banking is increased by the fact that the telephone channel is more and more popular with consumers: according the Javelin’ research, “about 35% of online consumers used their bank’s automated phone system the previous month to perform functions such as viewing account balances or paying bills.” Considering the lack of a unique security protocol to regulate authentication and financial transaction over the phone, an increase of frauds via the telephone banking channel is highly predictable. Actually, an authentication standard for online and telephone banking has been already launched at the end of 2005 in the UK . It had the form of a small device in which users had to insert a chip and a PIN card. After a four-digit PIN code is entered, a numeric, one-time-only password is generated according to an algorithm and displayed on the screen of the device.
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