AOL, RSA, VeriSign push authentication services

Responding to a scourge of online fraud and identity theft that threatens to undermine public confidence in Internet commerce, major companies are rolling out new services to encourage the adoption of better technology to identify customers, business partners, and employees online.

RSA Security Inc. and America Online Inc. (AOL) plan to announce a new program on Tuesday called “AOL PassCode” that will encourage AOL customers to use secure tokens to protect account information. On the same day, VeriSign Inc. plans to announce a new service called Unified Authentication that it said will reduce the cost of so-called “strong authentication,” such as one-time passwords or hardware smart cards.

The announcements are the latest signs of increasing interest from companies and online merchants in the use of “two-factor authentication,” which combines an account password with another “factor” such as a smart card, USB (Universal Serial Bus) token, or a one-time password, to combat a steep increase in online crimes that trick users into divulging sensitive financial information, the companies said.

The PassCode program will offer AOL-branded SecurID tokens from RSA to AOL customers for added account protection, said John Worrall, vice president of worldwide marketing at RSA of Bedford, Massachusetts.

The program is the first major rollout of multifactor authentication to consumers, according to Ned Brody, senior vice president of premium services at AOL.

Likening the RSA SecurID token to a “dead bolt lock” on a door, Brody said the service will let security-conscious consumers feel more confident that their AOL account information is secure, especially in light of the increase in phishing scams. This type of fraud uses spam and Web sites designed to look like legitimate e-commerce sites to part consumers from sensitive information such as user names, passwords and credit card information.

While AOL does not store customer financial information in its accounts, customers increasingly use free storage linked to their AOL accounts to store confidential data such as photos and personal files, including financial files, in addition to e-mail. Company data shows that AOL customers know that static passwords should be updated frequently, but few do so. The PassCode token will also enforce strong passwords by requiring a unique value to be entered each time users log on to the service, Brody said.

AOL customers can sign up through the company’s Web page for the premium service and will pay a US$9.95 one-time fee to receive a keychain token by mail. The company will charge $1.95 per month to secure one screen name through PassCode, and $4.95 a month for up to seven screen names, AOL said.

Once the token is received, AOL customers can activate it through their AOL account. After that, customers will log in using their AOL user name and password, after which they will be presented with an additional screen asking them to enter the unique, six-digit value displayed on their PassCode token. Behind the scenes, AOL maintains a database that links the SecurID token to the AOL user account and tracks the passwords generated by the device, which change every 60 seconds, Brody said.

The new system will protect users from having their AOL account information stolen in a phishing attack because having an AOL customer’s user name and password will no longer be adequate to access an account, he said.

Customers who lose their token can “unbind” their account from the token by answering a number of questions through AOL’s Web site that will identify them, then request a replacement token from the company, he said.

AOL has already conducted a small test release of the technology in the last week, but will begin marketing the service in earnest on Tuesday with its announcement, along with banner ads for its customers and information in AOL’s Safety and Security Center. The company will not estimate how many PassCode tokens it hopes to sell, but said that internal polls and a test run of the service in late 2003 indicated that the interest in purchasing the tokens was “phenomenal,” he said.

PassCode is just the latest in a series of premium services introduced by AOL in the last 18 months. Other services include AOL Virus protection, which uses McAfee Inc.’s antivirus software to protect customers from e-mail borne threats. The company is planning more security services in coming months, and is also looking at ways to extend the PassCode service to secure other e-commerce services available to its customers, he said.

The company also announced a partnership with Microsoft Corp. in February to offer SecurID for Windows, a handheld token that allows users to log on to Windows 2000 and XP machines using a one time password, without requiring a connection to an RSA server to authenticate the user.

Multifactor authentication is also the focus of VeriSign’s Unified Authentication program. The new service is an extension of the company’s Intelligence and ControlSM Services, which offer businesses network security information and tools.

Companies can use VeriSign’s infrastructure to validate strong authentication information for users, while relying on existing user directory services, such as Microsoft Corp. Active Directory and Radius servers, or single-sign on technology, such as IBM Corp.’s Tivoli Identity Management software, VeriSign said.

User login and permissions information will reside in the customer’s user directory, but will be linked to a unique serial number for a secure token or other authentication device stored on a VeriSign server. Login requests by users will be passed to the VeriSign server where a stored algorithm will validate that the serial number of the secure token or the one-time password is valid for the user requesting access, said Mark Griffiths, vice president of security services at VeriSign.

Unified Authentication customers will have the option of deploying the authentication verification service internally or using it as a managed service hosted by VeriSign, the company said.

“Technology companies, us included, have tended to offer point solutions. But now companies are saying ‘I want to issue employees or business partners a different kind of credential … and I want something integrated,'” Griffiths said.

VeriSign will initially deploy the services with either a USB smart card that contains a digital certificate, or with a clientless one-time password token that generates a unique password for use at Internet kiosks, home computers or PDAs (personal digital assistants), he said.

The company plans to add support for other credentials including cellular telephones with build in certificates and low-cost “soft certificates” like scratch cards containing one-time passwords, Griffiths said.

On the back end, VeriSign will distribute a plugin program for Microsoft’s Management Console allowing allow customers to link user accounts with a particular strong authentication device for validation. Separate plugins will redirect authentication requests from Active Directory or other LDAP (Lightweight Direction Access Protocol) directories to the Unified Authentication service for verification, he said.

While VeriSign’s service is focused on enterprises and AOL’s new service is focused on consumers, the two announcements are a sign of increasing competition within the market for multifactor authentication and PKI (public key infrastructure) technology, which RSA has long dominated, according to Laura Koetzle of Forrester Research Inc.

Long dismissed as too expensive and difficult to implement, PKI and multifactor authentication are again getting the attention of enterprises and consumers frustrated by phishing attacks and hacking, she said.

By lowering the cost of deploying technology like SecurID tokens and PKI infrastructure, VeriSign is hoping to tap into demand among businesses for better login security for employees, business partners and customers, Koetzle said. The company also hopes to draw in small businesses through its hosted service offering, she said.

At the same time, RSA is driving down the cost of its tokens and trying to popularize the use of multifactor authentication by extending the technology to consumers through the partnership with AOL, she said.

While AOL probably won’t sell a token to all of its customers, it could still find a healthy market for the new premium service, according to Avivah Litan of Gartner Inc.

A recent Gartner survey found that security is a major concern for about 20 percent of online consumers and 60 percent or 70 percent of consumers who had been online fraud victims. Sixty percent of those surveyed said they would be more likely to spend money through or keep money with an online vendor that implements security technology and gives them a choice of using it, Litan said.

Presented with an increasingly hostile Internet and online commerce environment, and slow response on the security problem from merchants, banks and financial services companies, consumers may well reverse the trend of the last decade away from mediated Internet services like AOL that can help them keep their account and sensitive information secure, Litan said.