Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Banks Ready for Compliance Deadline

With a week to go before the FFIEC deadline, most financial institutions are ready for multifactor authentication

Dec. 31, 2006 will bring out an array of party hats, confetti, and noisemakers across the globe. But in the recesses of data centers in many banks and financial institutions, that date may give IT workers another reason to pop the champagne cork.

New Year's Eve is the final deadline for financial organizations to meet multifactor authentication requirements outlined by the Federal Financial Institutions Examinations Council (FFIEC), which helps to govern security requirements for banks and other organizations that handle consumer funds. The FFIEC guidelines, which were issued in October of last year, require financial institutions to deploy a second form of user authentication by Dec. 31 or face fines of $10,000 and up.

And it looks like most banks will beat the deadline, experts say. "I would say about 80 percent of the industry is in full compliance right now," says Marne Gordan, director of regulatory affairs at Cybertrust. "Even among the organizations that aren't in compliance, most of them are in position to be compliant before the auditors start doing their examinations."

The Aite Group LLC, a research firm that follows the financial services industry, confirms that the majority of banks will achieve FFIEC compliance by the Dec. 31 deadline, though its numbers are less optimistic. In a report issued at the beginning of last month, The Aite Group estimated that 66 percent of financial institutions will be in compliance by the end of the year, with the rest following in 2007.

"Even for the organizations that don't make it, there's still some time," Gordan observes. The FFIEC will begin making its examinations in February, she notes, and even then, "they will probably give some grace to organizations that have made a good-faith effort to achieve compliance, but may have overlooked something in the process," she predicts.

Unlike other compliance guidelines, such as Sarbanes-Oxley or HIPAA, the FFIEC guidelines are fairly straightforward. They state that banks and financial institutions that do business online must implement a second factor of authentication -- besides the simple password -- by the end of the year.

That second factor of authentication could be a "security question" that is difficult for a phisher or identity thief to discover, or it could be a token, smart card or biometric signature that a thief cannot replicate.

With phishing and identity fraud running rampant -- and scaring away many online customers -- most banks and financial institutions were moving in the direction of multifactor authentication anyway, experts say. The Anti-Phishing Working Group reported a 50 percent increase in phishing sites between September and October (See Report: Phish Jump), and some banks have completely stopped using email as a means of communicating with customers.

"It's out of control," says Gordan. "Two-factor authentication won't solve the problem, but at least it will put a stop to the simplest phishing techniques, where the phisher just sends out a lot of spam and hopes that users will give up their passwords. Now, the phisher will have to get two pieces of information, and those pieces of information will be different from bank to bank."

There are a few financial organizations -- mostly smaller credit unions -- that still haven't done anything with FFIEC compliance, but most of the organizations are up to speed, Gordan says.

"This is one area where compliance makes good business sense," Gordan says. "Identity theft is such a huge problem. Meeting the FFIEC deadlines will help."

— Tim Wilson, Site Editor, Dark Reading

  • Cybertrust

    Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

    Comment  | 
    Print  | 
    More Insights
  • Comments
    Newest First  |  Oldest First  |  Threaded View
    Ransomware Is Not the Problem
    Adam Shostack, Consultant, Entrepreneur, Technologist, Game Designer,  6/9/2021
    How Can I Test the Security of My Home-Office Employees' Routers?
    John Bock, Senior Research Scientist,  6/7/2021
    New Ransomware Group Claiming Connection to REvil Gang Surfaces
    Jai Vijayan, Contributing Writer,  6/10/2021
    Register for Dark Reading Newsletters
    White Papers
    Cartoon Contest
    Write a Caption, Win an Amazon Gift Card! Click Here
    Latest Comment: Zero Trust doesn't have to break your budget!
    Current Issue
    The State of Cybersecurity Incident Response
    In this report learn how enterprises are building their incident response teams and processes, how they research potential compromises, how they respond to new breaches, and what tools and processes they use to remediate problems and improve their cyber defenses for the future.
    Flash Poll
    How Enterprises are Developing Secure Applications
    How Enterprises are Developing Secure Applications
    Recent breaches of third-party apps are driving many organizations to think harder about the security of their off-the-shelf software as they continue to move left in secure software development practices.
    Twitter Feed
    Dark Reading - Bug Report
    Bug Report
    Enterprise Vulnerabilities
    From DHS/US-CERT's National Vulnerability Database
    PUBLISHED: 2021-06-16
    SAP NetWeaver ABAP Server and ABAP Platform, versions - 700, 701, 702, 731, 740, 750, 751, 752, 753, 754, 755, 804, does not create information about internal and external RFC user in consistent and distinguished format, which could lead to improper authentication and may be exploited by malicious u...
    PUBLISHED: 2021-06-16
    Valine 1.4.14 allows remote attackers to cause a denial of service (application outage) by supplying a ua (aka User-Agent) value that only specifies the product and version.
    PUBLISHED: 2021-06-16
    TeamViewer before 14.7.48644 on Windows loads untrusted DLLs in certain situations.
    PUBLISHED: 2021-06-16
    Citrix ADC and Citrix/NetScaler Gateway 13.0 before 13.0-76.29, 12.1-61.18, 11.1-65.20, Citrix ADC 12.1-FIPS before 12.1-55.238, and Citrix SD-WAN WANOP Edition before 11.4.0, 11.3.2, 11.3.1a, 11.2.3a, 11.1.2c, 10.2.9a suffers from uncontrolled resource consumption by way of a network-based denial-o...
    PUBLISHED: 2021-06-16
    Citrix ADC and Citrix/NetScaler Gateway before 13.0-82.41, 12.1-62.23, 11.1-65.20 and Citrix ADC 12.1-FIPS before 12.1-55.238 suffer from improper access control allowing SAML authentication hijack through a phishing attack to steal a valid user session. Note that Citrix ADC or Citrix Gateway must b...