Online banking security plan in doubt

A new security measure being evaluated by Australia's banks may not go ahead after a large vendor last week ditched its product. The technology involves sending passwords to customers via SMS so they can verify transactions. But RSA Security said the costs of companies having to send out mass SMS messages coupled with the poor mobile coverage in many areas meant the product was not viable. RSA said when banks examined the technology they soon realised it was too costly.

RSA withdrew the product, RSA Mobile, following poor take-up but will continue to support current customers including NZ's ASB Bank. National Australia Bank announced last month it was looking at SMS authentication. NAB said that RSA's quotes of SMS messages costing millions of dollars a year didn't ring true. The bank said it would keep costs down by allowing customers with regular payees to “pre-authenticate” themselves with codes just once, when they initially set up each account. Customers who know they're in poor mobile coverage areas could also opt to pre-authenicate themselves.