Cyber Security Institute

Wednesday, October 12, 2005

NEW USA FFIES Guidance

The Federal Financial Institutions Examination Council (FFIEC) has issued attached guidance for banks offering Internet-based financial services.  Tthe guidance describes enhanced authentication methods that regulators expect banks to use when authenticating the identity of customers using the on-line products and services. Examiners will review this area to determine a financial institution’s progress in complying with this guidance during upcoming examinations. Financial Institutions will be expected to achieve compliance with the guidance no later than year-end 2006.

Highlights:
- Financial institutions offering Internet-based products and services should use effective methods to authenticate the identity of customers using those products and services.
-  Single-factor authentication methodologies may not provide sufficient protection for Internet-based financial services.
-  The FFIEC agencies consider single-factor authentication, when used as the only control mechanism, to be inadequate for high-risk transactions involving access to customer information or the movement of funds to other parties.
-  Risk assessments should provide the basis for determining an effective authentication strategy according to the risks associated with the various products and services available to on-line customers.
-  Customer awareness and education should continue to be emphasized because they are effective deterrents to the on-line theft of assets and sensitive information.
http://www.fdic.gov/news/news/financial/2005/fil10305.html