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How Not To Stop Online-Bank Fraud

In This Issue:
1. Editor's Note: How Not To Stop Online-Bank Fraud
2. Today's Top Story
    - CIO Hiring Increases
    - IT Midlife Crisis
3. Breaking News
    - Greenspan Loves Tech. Here's What His Likely Successor Thinks.
    - Fast Desktop-Search Platform Comes Gunning For Google
    - Congress Wants U.S. To Retain Grip On Internet
    - Gadgetry's New Glue
    - MySQL 5.0 Ready To Download
    - No Quick Cure For Health-Care System
    - U.S. Investment Firms To Accelerate Tech Spending
    - Startup Seeks To Rev Market For Lower-Power Chips
    - Lexmark Pitches Sub-$500 Color Printer
    - Feds Order Banks To Strengthen Online Authentication
4. In Depth: IPod & Mobile Computing
5. Voice Of Authority: BlackBerry Thumb
6. White Papers: E-Learning
7. Get More Out Of InformationWeek
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Plagues of locusts everywhere,
Or a cataclysmic earthquake,
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Good God, Sir, was that fair?"
-- John Adams' prayer, from the movie "1776"

1. Editor's Note: How Not To Stop Online-Bank Fraud

In the name of protecting against phishing, identity theft, and other forms of fraud, federal regulators handed banks and consumers an enormous job recently. The work required will make online transactions a great deal more expensive for banks, which will no doubt pass the expense on to customers. The requirement will make online transactions far less convenient for consumers. And it'll be, at best, partially effective.

As reported in a story by my colleague Steven Marlin, the Federal Financial Institutions Examination Council is giving banks until the end of next year to implement two-factor authentication for online transactions. Right now, banks only use one-factor authentication: You go to the bank's Web site, enter in a logon and password, and you're in your account.

With two-factor authentication, you'll need something else in addition to your password to get in. Generally speaking, that something else is a hardware token, such as a smart card or a gadget the size of a key fob that generates one-time passwords. (For a photo of one of those gadgets, follow the link in the previous story.) Some banks distribute a list of one-time passwords on a scratch-off card.

Implementing support for two-factor authentication is going to be a huge expense for banks.

Moreover, for consumers, it's one more thing to worry about, remember, and eventually lose and have to go to the trouble of replacing.

But it'll be worth it if it wipes out online bank fraud, right?

One problem: It won't.

Steve's article points out that crooks will simply trick consumers into giving up their one-time passwords; this has already happened at a Scandinavian bank that implemented two-factor authentication.

For more on the pitfalls of the two-factor authentication requirement, and to leave your 2 cents, see my blog entry on this subject.

Also: Check out my first videocast: a two-minute discussion of the troubling future of Firefox. It's my first effort at video blogging, so the production values are crude. You can hear what I'm saying perfectly clearly, and follow the necessary graphics, but I look like a doofus. So watch the video, and, while I'm onscreen, point at me and laugh. I don't mind.

And for a way-cooler video than mine, visit The News Show for Sacha Lecca's one-minute review of the CVS disposable video camera and some footage he shot using the camera at a recent skateboarding competition on the mean streets of New York.

Mitch Wagner
[email protected]

2. Today's Top Story

CIO Hiring Increases
The number of companies looking for CIOs is up significantly. Do you need a change?

Related Story:
IT Midlife Crisis

Change overshadows the IT profession, especially in the United States. Here are some key statistics at a glance.

3. Breaking News

Greenspan Loves Tech. Here's What His Likely Successor Thinks.
IT-fueled productivity gains have been a hallmark of Greenspan's tenure as Fed chief. Nominee Ben Bernanke has his own take on IT, productivity, and outsourcing.

Fast Desktop-Search Platform Comes Gunning For Google
Proliferation of desktop-search software is also raising security concerns.

Congress Wants U.S. To Retain Grip On Internet
A trio of lawmakers in the House of Representatives has joined a Senate colleague in calling for the United States to retain oversight control of the Internet, as a coming showdown looms with countries wanting more say in how the Web is run.

Gadgetry's New Glue
Businesses want to communicate without the barriers of proprietary technology and fragmented networks. The industry is starting to listen.

MySQL 5.0 Ready To Download
The free download contains new stored procedures, views that will protect sensitive information from unauthorized users, and an information schema to give companies access to database metadata.

No Quick Cure For Health-Care System
With health-care costs soaring, IT can play a role in fighting further increases.

U.S. Investment Firms To Accelerate Tech Spending
IT budgets will rise in 2006 as priorities shifting from cost-cutting to driving revenue and business investment.

Startup Seeks To Rev Market For Lower-Power Chips
At a trade show this week, P.A. Semi will announce a high-performance chip it claims will consume up to 10 times less power than today's comparable products. The catch: The chip won't be available until 2007.

Lexmark Pitches Sub-$500 Color Printer
In a bid to become more competitive, the company's new line of color laser printers will break the $500 barrier.

Feds Order Banks To Strengthen Online Authentication
Regulators say the use of single-factor authentication is inadequate for safeguarding against account fraud and identity theft.

All our latest news

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4. In Depth: IPod & Mobile Computing

Review: Video IPod
It's the best iPod by far, and comparatively inexpensive. But does it do a good job displaying video?

Nano No-No? Apple Hit With Lawsuit
A class-action lawsuit accuses Apple of knowing that its new iPod nano portable music player could be easily damaged by normal use.

Personal Tech Guide
Your guide to what's new, useful, and just plain fun. This week we look at the Kinetic Perpetual dress watch, the WiFlyer+V, the Firefly and Enfora mobile phones, Salton's Beyond Microwave, the StealthSurfer II, CEO's IQ rCard, and the Magellan Roadmate 800.

BlackBerry Addicts Suffer Painful Thumb Injuries
Repetitive-motion injuries nicknamed "BlackBerry Thumb" afflict users of BlackBerrys, Treos, Sidekicks, and other devices with miniature thumb keyboards.

5. Voice Of Authority: BlackBerry Thumb

Handheld Hell
Patricia Keefe notes a recent report about repetitive-stress injuries affecting BlackBerry addicts, and realizes that technology advances are putting lots of dents and dings into fragile human bodies.

6. White Papers: E-Learning

One-On-One Laptop Initiatives--Providing Tools For 21st Century Learners
This paper about E-learning will explore the goals behind one-to-one initiatives, the fundamental issues to consider before rolling out a program, and analysis of successful one-to-one programs that have transformed classrooms--and communities--using technology.

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