Still Waiting
I'd like to say that a search deeper into the Fortune 100 yielded more promising results, but it didn't. Neither Wells-Fargo nor Wachovia, the fourth and fifth largest banks in the country, mentioned strong authentication on their websites, at least that I could find. It was just more of the same, with Wells-Fargo even boasting that it "now allows you to select your own, personal username to sign on, instead of your Social Security number."

The fact is, there is-or could be-a compelling case that online banking is more secure than the old-fashioned kind. Keeping things like monthly statements out of snail mail has its advantages. E-mail alerts can help people spot problems with fraud early on. And having customers engaged with online banking sites creates brand affinity that the banks could profit from.

Unfortunately, at this point, it looks like banks are still focusing on convenience and free offers, not on making customers more confident that their accounts won't be misused. The supposed liability protections for fraudulent transactions seem to have been created not to increase customer protection, but to explicitly state that the financial burden for being duped by a phishing scam falls on the customer. Meanwhile, regardless of the looming FFIEC deadline, none of the banks I studied is offering true two-factor authentication to the masses.

It all adds up to a missed opportunity for banks. Sure, strengthening authentication costs money, but banks stand to make money by attracting new customers and increasing efficiency. Freed attributes the lack of progress to a follow-not-lead mentality on the part of the banking industry. Unfortunately, he says, right now, banks are following the wrong types of companies.

"I think they look very hard at the online retail industry to see what's going on there, but it's a very different transaction when you're dealing with your credit card than when you're talking about savings accounts, checking accounts and brokerage accounts. One bank is going to have to step out and take the lead, and it will probably be a smaller bank." So I guess we're still waiting. Honey, if you're reading, can you please pick up more stamps? I need to mail some bills.