HSBC is stepping up security for its internet banking business customers by issuing them with authentication devices free of charge.

Some 180,000 password authentication devices will be sent to UK business customers starting next month, as the bank looks to step-up defences against internet criminals.

The key-ring sized devices, from IT supplier Vasco, is expected to reduce the risk of online fraud, resulting from phishing, keylogging trojan software and computer hackers.

When logging on to the internet banking service HSBC business customers will be asked to verify themselves using something they know, such as a password and also an object they physically have – in this case the Vasco device, which generates a unique passcode.

The bank says it has decided to introduce the portable tokens due to a growing concern among the banking industry about the increase and sophistication of internet crime.

'[It] will enable us to stay one step ahead of the fraudsters. Our experience in other parts of the world shows that this kind of two factor authentication is an extremely useful weapon in the fight against internet crime and we would urge other banks in the UK to seriously consider following our lead,' said Simon Wainwright, head of business banking at HSBC.

The system will replace a digital certificates system currently used by the bank's business customers and follows trials that have taken place in Brazil and Hong Kong.
Last month, Lloyds TSB revealed that it had eliminated online banking fraud among some 23,500 customers who were testing similar key-ring sized devices during a five month trial.

Other UK banks such as Alliance & Leicester and Coutts are also offering different forms of two-factor authentication technology to protect their customers from identity fraud and financial losses.

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