In order to understand the power of the three layers of security required by the June 2011 Supplement to the FFIEC’s 2005 Guidance on Authentication in an Internet Banking Environment, it is helpful to understand just how a corporate account takeover (CAT) attack works. Nowadays, criminals can purchase applications that are designed to attack American banks. One such application, Zeus, thought to be sold by the Russian Business Network for around $4500, comes with optional modules used to compromise various controls.

Even true two-factor authentication will not always thwart such an attack. During the monitoring phase of the attack, upon recognizing the means of two-factor authentication being used, if the value in the account is high enough, the criminal can justify purchasing additional modules to the application that will allow a compromise of the multi-factor authentication control. For example, if the victim’s bank uses key-fobs for the “what-you-have” authentication, the bad guy can install a remote control module of the malware, and then simply use the remote control functionality to wiggle the victim’s mouse after a legitimate internet banking session to keep the session open and, once it is clear the victim is no longer paying attention, execute a transfer of funds.

If banks teach customers not to rely solely on the time-out features of the system, and thus should log out after finishing their banking, the veracity of the bank’s two-factor authentication solution is enhanced. Likewise, if a bank has a detect and response system in place, they can stop fraudulent transactions before damages are experienced, or at least minimize the damages.

Institutions still relying on a one-dimensional approach offered by their vendors are fooling themselves. Criminals want to know who these institutions are, because they know the likelihood of breaching that institution will be much higher with those that are not implementing all three layers of protection!