In an effort to build and maintain competitiveness, many organizations have made their services available to the general public via the Internet. The free flow of information afforded by the Internet can provide better products and services to the consumer and a competitive advantage to the organization. In addition, many organizations are providing their employees with access to protected network resources in order to increase productivity and efficiency.

Rising consumer concern
This trend has its drawbacks however. Although the "traditional" types of fraud still far outweigh their online cousin, consumer concerns about online security and identity theft are on the rise as businesses and especially financial institutions face an onslaught of cyber crime. According to the U.S. Federal Trade Commission, online fraud and identity theft has become the world's fastest-growing crime, claiming almost 1 million victims in 2005 in the United States alone and the threat of such fraud has proven to significantly impact consumers' confidence and behaviour in the online channel.

Billions in lost sales
Phishing, spoofing, pharming and other security threats are negatively affecting consumer confidence and unless more is done to help protect their identity and safeguard their sensitive information, online transaction activity by consumers will continue to be impeded.

Results from a survey conducted by the research firm Gartner Group, suggest that online retailers lost sales to the tune of nearly US$2 billion in 2006. One billion of that is credited to those who refuse to shop online and the remaining $913 million was lost as online shoppers cut back on their total spending. Some of the solutions suggested by Gartnerīs Vice President and analyst, Avivah Litan were to implement stronger user authentication and data masking/truncation of sensitive data that is shown on web-based screens.

Need for strong authentication
A research study conducted by RSA Security underscores this view by showing that 80% of consumers would have more trust in transacting online if they were provided with strong authentication, thereby demonstrating the effect of stronger user authentication on consumer attitude and behavior.

The most effective way to offer such strong user authentication is through the use of two-factor authentication, variable password solutions where passwords are only good for a single login. These solutions can be hardware and/or software based and, if your organization does not already use one, it will be worth investigating the available options.